Simplex Infrastructures - 1QFY2013 Result Update - Angel Broking

For 1QFY2013, Simplex Infrastructures (Simplex)' numbers came higher-thanexpectations on the revenue front but owing to higher interest cost, the performance at the earnings level was in line with our estimate. At the end of the quarter, the company's order book stood at Rs.15,508cr (2.3x FY2013E revenue). Simplex witnessed an order inflow of Rs.1,888cr for the quarter which was boosted by captive road build-operate-transfer (BOT) orders of ~Rs.1,230cr.

Numbers broadly in line with estimates: On the top-line front, Simplex reported a robust growth of 28.1% yoy to Rs.1,585cr, higher than our estimate of Rs.1,425cr (consensus Rs.1,472cr). The revenue contribution from the domestic and overseas business stood at 88% and 12% respectively in 1QFY2013. The EBITDAM dipped by 30bp yoy to 8.0% for the quarter, marginally lower than our estimate of 8.3%. The interest cost came at Rs.70.0cr, a y-o-y/q-o-q jump of 35.2%/2.3%, and higher than our estimate. The interest cost was higher owing to increase in working capital. The PAT declined by 16.5% yoy to Rs.20.0cr, in line with our estimate and consensus of Rs.20cr and Rs.19cr respectively.

Outlook and valuation: Simplex has been performing well on the revenue front since the last four consecutive quarters and has a strong order book (Rs.15,508cr 2.3x FY2013E revenue). However the management has given a guidance of 10-15% on the revenue front for FY2013 owing to the macro challenges faced by the sector. 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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