Simplex Infra -stock update.
Strong growth in FY09: Simplex Infra witnessed a strong 68.6% YoY rise in its revenues to Rs47.4bn in FY09. Operating expenses increased by 69.1% YoY to Rs43bn driven mainly by consumption of materials (45.4% of net sales) & employee cost (31.6% of net sales). While operating profits surged 64.2% YoY led by the buoyant topline growth, OPM declined marginally by ~25bps to 9.3%. Net profits for the year were at Rs1.2bn (+37% YoY) translating into an EPS of Rs24.9.
Strong Order book at ~Rs101bn: Fresh order inflows for the quarter stood at Rs1.1bn, taking the full year inflows to Rs56.6bn (+15.5% YoY). Around 30% of the backlog consists of overseas projects; 36% accrue from the Government sector & 34% from various private sector parties. ~95% of the present backlog remains completely hedged against commodity price fluctuations, barring piling jobs.
Valuations.
At the CMP of Rs392, SIL trades at a P/E of 12x & EV/EBIDTA of 6.2x its FY10E earnings. We value its core construction business at Rs457 (14x FY10E EPS) & its 85% stake in the oil drilling business at ~Rs10/share. Thus, on a SOTP basis the fair value of the stock works out to 465.
Strong growth in FY09: Simplex Infra witnessed a strong 68.6% YoY rise in its revenues to Rs47.4bn in FY09. Operating expenses increased by 69.1% YoY to Rs43bn driven mainly by consumption of materials (45.4% of net sales) & employee cost (31.6% of net sales). While operating profits surged 64.2% YoY led by the buoyant topline growth, OPM declined marginally by ~25bps to 9.3%. Net profits for the year were at Rs1.2bn (+37% YoY) translating into an EPS of Rs24.9.
Strong Order book at ~Rs101bn: Fresh order inflows for the quarter stood at Rs1.1bn, taking the full year inflows to Rs56.6bn (+15.5% YoY). Around 30% of the backlog consists of overseas projects; 36% accrue from the Government sector & 34% from various private sector parties. ~95% of the present backlog remains completely hedged against commodity price fluctuations, barring piling jobs.
Valuations.
At the CMP of Rs392, SIL trades at a P/E of 12x & EV/EBIDTA of 6.2x its FY10E earnings. We value its core construction business at Rs457 (14x FY10E EPS) & its 85% stake in the oil drilling business at ~Rs10/share. Thus, on a SOTP basis the fair value of the stock works out to 465.
It is one of well managed infra stocks. sharp correction can be used to buy this stock.
ReplyDeletecurrently infra stocks are good for investment.
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