McNally Bharat Engineering - Result Update - Emkay

Reco: HOLD
CMP: Rs117
Target Price: Rs 135

No re-rating catalysts, Downgrade to Hold

- Standalone revenues up 30% yoy to Rs4.9 bn. EBITDA margins stable at 6.5%. Net profit growth at Rs10% yoy to Rs125 mn – ahead estimates

- MSE disappoints with revenue decline of 28% yoy, EBITDA loss of Rs29 mn and net loss of Rs98 mn. CMT business net profit ahead estimates at Rs32 mn

- Order inflows dismal at Rs1.4 bn. Order book down 8% qoq to Rs36 bn. But L1 in orders worth Rs8.6 bn. Debt continues to rise – up 46% over Mar'11 to Rs4.2 bn

- Cut earning estimates by 20% for FY12E and 8% for FY13E. Foresee no re-rating catalysts in near term. Downgrade to Hold with revised target of Rs135 per share.

Source : Equity Bulls

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