ITD Cementation - 4QCY2012 Result Update - Angel Broking

ITD Cementation - 4QCY2012 (CMP: Rs. 201/ TP: Rs. 239/ Upside: 19%)

For 4QCY2012, ITD Cementation reported a disappointing set of numbers. The top-line for the quarter declined by 4.0% yoy to Rs. 313cr against our estimate Rs. 350cr. The company's operating margin contracted by 301bp yoy to 10.5% mainly because of higher employee cost. Major disappointment came on the profit front which stood at Rs. 1cr, 88.9% lower on a yoy basis and 77.7% lower than our expectation of Rs. 6cr, mainly due to the contraction in the operating margin.

However, recently the JV of ITD Cementation with its parent company, ITD, has bagged an order of Rs. 546cr from Delhi Metro Rail Corporation (DMRC). The order is scheduled to be completed in 30 months. ITD cementation (standalone) is also expecting an order worth ~Rs. 115cr in Ghaziabad for the construction of flyovers with scheduled completion in 15 months. The stock has witnessed a major correction recently and is currently trading at a PBV of 0.5x.

We maintain our Buy recommendation on the stock with a revised target price of Rs. 239 with a target P/BV of 0.6x for CY2014E, given the visibility of new order inflows.

Source : Equity Bulls

Keywords