Honeywell Automation - Q1CY2013 Result Review - Angel Broking

Honeywell Automation India Ltd. (HAIL) reported disappointing set of numbers for 1QCY2013. Top line came in 6.6% lower yoy to Rs. 385cr against our estimates of Rs. 526cr. The company's EBITDA came in marginally higher by 1.2% yoy to Rs. 24cr far lower than our estimate of Rs. 33cr. EBITDA margin was higher by 34 basis points yoy and came in at 6.2%. The improvement in EBITDA was mainly on account of lower raw material cost as percentage of sales by 677bp yoy which was majorly offset due to total 643bp rise in employee and other expenses. Net profit for the quarter stood at Rs. 15cr vis-à-vis Rs. 17cr in 1QCY2012 lower by 7.8% yoy, on the back of poor revenue growth.

Considering the poor performance of the company, at current market price, we recommend Neutral rating on the stock.

Source : Equity Bulls

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