Unity Infraprojects - Q3FY13 Result Update - Kotak

Result highlights: Revenues were in line with our estimates and strong operating margins led to net profits also coming in line with our estimates. Stock is currently trading at very attractive valuations and we continue to maintain BUY on the company.

- Revenue growth stood at 13% YoY, in line with our estimates. However, order inflow continued to remain low during the quarter led by general slowdown witnessed across segments.

- Operating margins came at 13.9% for Q3FY13, slightly ahead of our estimates.

- Net profit growth was boosted by excellent revenue growth and strong operating margins coupled with low tax rate.

- At current price of Rs 36, stock is trading at very attractive valuations of 2.7x and 2.4x P/E on FY13 and FY14 respectively. We marginally tweak our estimates and arrive at a revised target price of Rs 60 based on 4x FY14 estimated earnings (Rs 61 earlier) and continue to maintain BUY on the company mainly due to its extremely low valuations. Stock may underperform in near term due to lower order inflows but decline in interest rates going forward coupled with ramp up in order inflow would be positive for the company in medium to long term.

Source : Equity Bulls

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