Elecon Engineering - Reducing visibility, Retain Hold - Emkay

- Meets expectations – (1) Revenue up 26% yoy to Rs4.4 bn (2) EBITDA margin down 360 bps 14.5% (4) EBITDA up 16% yoy (3) Adjusting for higher tax rate, APAT meets estimates.

- MHE division surprised positively with 41% yoy revenue growth to Rs2.9 bn, EBIT margins at 13.3%. TE division revenue at Rs1.5 bn (-1%), EBIT mgn at 15.8% - below est.

- Order book increased to Rs15.2 bn (May'12) (1.2X revenues) on back of Rs5.5 bn orders secured in Apr-May'12 period. Cut FY13E earnings by 13%.

- Retain negative bias amidst risks to earnings estimates – both macro and micro level. Maintain HOLD rating with price target of Rs61 per share.

Source : Equity Bulls

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