Simplex Infrastructures - 4QFY2012 Result Update - Angel Broking

For 4QFY2012, Simplex Infra's (Simplex) numbers came broadly in-line with our estimates. At the end of the quarter, the company's order book increased by 4.0% yoy to Rs.15,224cr (2.5x FY2012 revenue). Simplex had order inflow of Rs.2,606cr for the quarter, taking the order inflow for FY2012 to Rs.6,446cr. Simplex has recently acquired Joy Mining (involved in underground mining, 220 employees) for Rs.38cr. This acquisition is part of a larger alliance and strategic understanding with Joy Mining. Further, for FY2012, Joy Mining's revenue and PAT stood at Rs.70cr and Rs.30cr, respectively.

Numbers broadly in-line with estimates: On the top-line front, Simplex reported robust growth of 32.0% yoy to Rs.1,796cr, marginally higher than our estimate of Rs.1,738cr. This is the third consecutive quarter when the company has reported 25%+ yoy growth on the revenue front. The company's EBITDAM dipped by 160bp yoy to 8.3% for the quarter, lower than our estimate of 9.0%. Interest cost came in at Rs.68cr, a jump of 47.7% yoy/17.9% qoq, against our estimate of Rs.60cr. PAT declined by 20.9% yoy to Rs.29cr, below our estimate of Rs.31cr. The company's lower-than-expected bottom-line performance was due to lower EBITDAM and higher interest cost during the quarter.

Outlook and valuation: Simplex has been performing well on the revenue front since the last three quarters, and it is expected to continue this robust performance going ahead as well on the back of its strong order book (Rs.15,224 2.5x FY2012 revenue). Further, Simplex is a well-diversified player in terms of sectors, geographies and client mix and, unlike its peers, has limited exposure to road BOT assets. Hence, we maintain our Buy view on the stock with a target price of Rs.265.

Source : Equity Bulls

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