BGR Energy - March 2013 Results Preview - Motilal Oswal

- We expect revenue to show a moderate growth of 2% during 4QFY13E over a lower base during last year. BGR has two major orders: one from Gayatri Project and second from TRN Energy (worth INR32b taken together), which would be the main drivers of revenue. Company is yet to start execution of NTPC orders.

- We expect EBITDA margin of 12.5%, up 60bp, impacted by negative operating leverage and higher share of EPC contracts. Management expects 11-12% EBITDA margin in FY13/14.

- Order book stands at INR120b as at end-December 2012 (excluding Darlipalli project of which bid validity period has expired), of which ~4% are product orders and remaining ~96% are projects. Projects include NTPC's bulk tenders of INR71b (58% of total order book), ~INR17-18b of EPC and remaining INR25-27b of BOP. We expect order intake to remain muted due to ongoing issues in the power generation sector.

- Land for the turbine factory has already been acquired and construction work is expected to commence shortly, and 70% of land for the boiler factory has been acquired.

- Maintain Neutral.

Source : Equity Bulls

Keywords