MBL Infrastructure Ltd

Transcription

1 Q4FY11 First Cut Enhancing investment decisions

2 Explanation of CRISIL Fundamental and Valuation (CFV) matrix The CFV Matrix (CRISIL Fundamental and Valuation Matrix) addresses the two important analysis of an investment making process Analysis of Fundamentals (addressed through Fundamental Grade) and Analysis of Returns (Valuation Grade) The fundamental grade is assigned on a five-point scale from grade 5 (indicating Excellent fundamentals) to grade 1 (Poor fundamentals) The valuation grade is assigned on a five-point scale from grade 5 (indicating strong upside from the current market price (CMP)) to grade 1 (strong downside from the CMP). CRISIL Fundamental Grade Assessment CRISIL Valuation Grade Assessment 5/5 Excellent fundamentals 5/5 Strong upside (>25% from CMP) 4/5 Superior fundamentals 4/5 Upside (1-25% from CMP) 3/5 Good fundamentals 3/5 Align (+-1% from CMP) 2/5 Moderate fundamentals 2/5 Downside (- 1-25% from CMP) 1/5 Poor fundamentals 1/5 Strong downside (<-25% from CMP) Analyst Disclosure Each member of the team involved in the preparation of the grading report, hereby affirms that there exists no conflict of interest that can bias the grading recommendation of the company. Disclaimer: This Company-commissioned Report (Report) is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. The Data / Report are subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this Report. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information only of the authorized recipient in India only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose.

3 Q4FY11 first cut Timely execution; sluggish order intake Fundamental Grade Valuation Grade Industry 3/5 (Good fundamentals) 5/5 (CMP has strong upside) Construction & Engineering MBL Infrastructure Ltd s (MBL s) Q4FY11 revenue and earnings were above CRISIL Equities expectations due to timely execution of projects. However, EBITDA margins declined by 23 bps y-o-y to 1.6% due to higher material and sub-contracting expenses. Further, its order intake during the year remained sluggish. We maintain our fundamental grade of 3/5. Q4FY11 result analysis MBL s Q4FY11 revenues registered robust growth of 81.8% y-o-y to Rs 3,855 mn given the timely execution of projects. For FY11, revenue grew by 57.2% y-o-y to Rs 1 bn. EBITDA margin declined by 23 bps y-o-y to 1.6% on the back of increased raw material and sub-contracting expenses. However, for FY11, EBITDA margin declined only by 65 bps 13.7% y-o-y. PAT increased 24.8% y-o-y to Rs 151 mn due to robust growth in revenue. However, PAT margin declined by 179 bps y-o-y to 3.9% given the higher interest expenses and tax outgo. For FY11, PAT increased by 66.9% to Rs 617 mn and PAT margin increased 36 bps to 6.2%. The company did not receive any new orders during the reported quarter. Valuations: Current market price has strong upside We continue to value MBL on sum-of-the-parts method. We have assigned a multiple of 7x to the FY12 contracting business with EPS of Rs 38 and valued the BOT business on DCF basis with Rs 2 per share, which gives a fair value of Rs 286 per share. Based on the current market price, our valuation grade is 5/5. KEY FORECAST (Rs mn) FY8 FY9 FY1 FY11# FY12E Operating income 2,945 5,143 6,377 1,16 9,223 EBITDA ,371 1,462 Adj PAT Adj EPS-Rs EPS growth (%) (32.6) Dividend yield RoCE(%) RoE(%) PE (x) P/BV (x) EV/EBITDA (x) NM: Not meaningful; CMP: Current Market Price #FY11 numbers based on the abridged financials estimate May 3, 211 Fair Value Rs 286 CMP Rs 155 CFV MATRIX KEY STOCK STATISTICS NIFTY / SENSEX 5473/18232 NSE / BSE ticker MBLINFRA Face value (Rs per share) 1 Shares outstanding (mn) 17.5 Market cap (Rs mn)/(us$ mn) 2,715/6 Enterprise value (Rs mn) /(US$ mn) 5,324/ week range (Rs) (H/L) 293/138 Beta.67 Free float (%) 43% Avg daily volumes (3-days) 5,351 Avg daily value (3-days) (Rs mn) 2.5 SHAREHOLDING PATTERN 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% Excellent Fundamentals Fundamental Grade Poor Fundamentals % Strong Downside Valuation Grade 24.8% 24.% 25.8% 25.3% 13.% 12.7% 12.6% 13.2% 4.8% 6.% 4.3% 4.3% 57.3% 57.3% 57.3% 57.3% PERFORMANCE VIS-À-VIS MARKET Returns Strong Upside Jun-1 Sep-1 Dec-1 Mar-11 Promoter FII DII Others 1-m 3-m 6-m 12-m MBL -21% -17% -1% -26% NIFTY -6% 3% -5% 9% ANALYTICAL CONTACT Sudhir Nair (Head) Sandeep Panchal Bhaskar Bukrediwala snair@crisil.com sapanchal@crisil.com bsbukrediwala@crisil.com Client servicing desk clientservicing@crisil.com CRISIL EQUITIES 1

4 Q4FY11 Result Summary (Rs mn) Q4FY11 Q3FY11 Q4FY1 q-o-q (%) y-o-y (%) FY11 FY1 y-o-y (%) Net sales 3,855 2,677 2, ,16 6, Materials and Sub Contract cost 3,284 2,136 1, ,132 5, % of net sales 85.2% 79.8% 8.% 543bps 523bps 81.19% 8.3% 93bps Employees cost Other expenses EBITDA (2.8) , EBITDA margin 1.6% 15.8% 12.9% -512bps -23bps 13.7% 14.3% -65bps Depreciation (1.6) EBIT (2.8) , Interest and finance charges (.6) Operating PBT (3.6) Other Income (2.9) PBT (3.2) Tax PAT (34.7) Adj PAT (34.7) Adj PAT margin 3.9% 8.6% 5.7% -471bps -179bps 6.2% 5.8% 36bps No of equity shares (Mn) (.) Adj EPS (Rs) (34.7) Revenue growth intact, EBITDA margin declined Quarterly PAT and PAT margins (Rs mn) (Rs mn) 4,5 4, 3,5 3, 2,5 2, 1,5 1, % 15.% 15.3% 15.8% 14.5% 14.8% 12.9% 1.6% 1,59 1,97 1,643 2,121 2,254 1,23 2, % 16% 14% 12% 1% 8% 6% 4% 2% % % 5.2% 8.6% 7.% 5.7% 6.4% 6.4% 3.9% % 9% 8% 7% 6% 5% 4% 3% 2% 1% % Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Mar-11 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Mar-11 Revenue EBITDA margin (RHS) PAT PAT margin (RHS) Share price movement vs. NIFTY Fair value movement since initiation (Rs) (') Jan-1 28-Feb-1 17-Apr-1 4-Jun-1 22-Jul-1 8-Sep-1 26-Oct-1 13-Dec-1 3-Jan Mar-11 6-May-11 2-Jun-1 21-Jun-1 8-Jul-1 27-Jul-1 13-Aug-1 1-Sep-1 21-Sep-1 8-Oct-1 27-Oct-1 15-Nov-1 3-Dec-1 23-Dec-1 11-Jan Jan Feb-11 9-Mar Mar Apr-11 6-May May-11 MBL NIFTY -indexed to 1 Traded Quantity (RHS) CRISIL Fair Value MBL Source: NSE, CRISIL Equities CRISIL EQUITIES 2

5 FINANCIALS Income statement Balance Sheet (Rs mn) FY9 FY1 FY11# (Rs mn) FY9 FY1 FY11# Operating income 5,143 6,377 1,16 Liabilities EBITDA ,371 Equity share capital EBITDA margin 14.5% 14.4% 13.7% Reserves 864 2,66 2,632 Depreciation Minorities EBIT ,275 Net worth 982 2,241 2,87 Interest Convertible debt Operating PBT Other debt 1,57 1,689 2,99 Other income Total debt 1,57 1,689 2,99 Exceptional inc/(exp) 1 (96) - Deferred tax liability (net) PBT Total liabilities 2,639 4,75 5,924 Tax provision Assets Minority interest Net fixed assets 1,245 1,45 1,658 PAT (Reported) Capital WIP Less: Exceptionals 1 (96) - Total fixed assets 1,245 1,498 1,658 Adjusted PAT Investments - - Current assets Ratios Inventory ,942 FY9 FY1 FY11# Sundry debtors 1,2 2,213 2,464 Growth Loans and advances Operating income (%) Cash & bank balance EBITDA (%) Marketable securities Adj PAT (%) Total current assets 2,695 4,342 5,49 Adj EPS (%) 51.3 (8.7) 66.9 Total current liabilities 1,31 1,766 1,143 Net current assets 1,394 2,576 4,266 Profitability Intangibles/Misc. expenditure EBITDA margin (%) Total assets 2,639 4,75 5,924 Adj PAT Margin (%) RoE (%) Cash flow RoCE (%) (Rs mn) FY9 FY1 FY11# RoIC (%) Pre-tax profit Total tax paid (74) (123) (243) Valuations Depreciation Price-earnings (x) Working capital changes (834) (1,297) (1,727) Price-book (x) Net cash from operations (443) (82) (951) EV/EBITDA (x) Cash from investments EV/Sales (x) Capital expenditure (196) (32) (255) Dividend payout ratio (%) Investments and others - - () Dividend yield (%) Net cash from investments (196) (32) (255) Cash from financing B/S ratios Equity raised/(repaid) (1,28) Inventory days Debt raised/(repaid) ,22 Creditors days Dividend (incl. tax) (27) (41) (48) Debtor days Others (incl extraordinaries) (149) - 1,25 Working capital days Net cash from financing 818 1,7 1,169 Gross asset turnover (x) Change in cash position 178 (115) (37) Net asset turnover (x) Closing cash Sales/operating assets (x) Current ratio (x) Quarterly financials Debt-equity (x) (Rs mn) Q4FY1 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Net debt/equity (x) Net Sales 2,121 2,254 1,23 2,677 3,855 Interest coverage Change (q-o-q) 29% 6% -45% 118% 44% EBITDA Per share Change (q-o-q) 15% 22% -38% 15% -3% FY9 FY1 FY11# EBITDA margin 12.9% 14.8% 16.7% 15.8% 1.6% Adj EPS (Rs) PAT CEPS Adj PAT Book value C hange (q-o-q) 15% 3% -5% 194% -35% Dividend (Rs) Adj PAT margin 5.7% 7.% 6.4% 8.6% 3.9% Actual o/s shares (mn) Adj EPS #FY11 numbers based on the abridged financials estimate CRISIL EQUITIES 3

6 CRISIL Independent Equity Research Team Mukesh Agarwal Senior Director +91 (22) Tarun Bhatia Director, Capital Markets +91 (22) Chetan Majithia Head, Equities +91 (22) Sudhir Nair Head, Equities +91 (22) Prasad Koparkar Head, Research +91 (22) Ajay D'Souza Head, Research +91 (22) Aparna Joshi Head, Research +91 (22) Manoj Mohta Head, Research +91 (22) Sridhar C Head, Research +91 (22) sridharc@crisil.com CRISIL s Equity Offerings The Equity Group at CRISIL Research provides a wide range of services including: Independent Equity Research IPO Grading White Labelled Research Valuation on companies for use of Institutional Investors, Asset Managers, Corporate Other Services by the Research group include CRISINFAC Industry research on over 6 industries and Economic Analysis Customised Research on Market sizing, Demand modelling and Entry strategies Customised research content for Information Memorandum and Offer documents

7 About CRISIL CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest banks and leading corporations. About CRISIL Research CRISIL Research is the country s largest independent and integrated research house with strong domain expertise on Indian economy, industries and capital markets. We leverage our unique research platform and capabilities to deliver superior perspectives and insights to over 12 domestic and global clients, through a range of research reports, analytical tools, subscription products and customised solutions To know more about CRISIL IER, please contact our team members: Vinaya Dongre Head, Business Development vdongre@crisil.com I Phone : Ashish Sethi Head, Business Development asethi@crisil.com I Phone : Sagar Sawarkar Senior Manager, Business Development ssawarkar@crisil.com I Phone : Regional Contacts: Ahmedabad / Mumbai / Pune Vishal Shah - Manager, Business Development vishah@crisil.com I Phone : Bengaluru / Chennai Anand Krishnamoorthy - Manager, Business Development ankrishnamoorthy@crisil.com I Phone : Hyderabad Kaliprasad Ponnuru - Manager, Business Development kponnuru@crisil.com I Phone : Kolkata / Delhi Priyanka Agarwal - Manager, Business Development priyagarwal@crisil.com I Phone : Head Office: CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai Phone : Web: Download reports from: