ITD Cementation - 1QCY2013 Result Review - Angel Broking

ITD Cementation reported numbers for 1QCY2013. The revenue of the company for the quarter declined by 7.6% on yoy basis, mainly on account of delay in project execution and hence the delay in revenue recognition. However, on qoq basis, the revenue witnessed a growth of 13.2% and came in at Rs. 355cr, better than our expectation of Rs. 339cr. The company's operating margin contracted by 295bp yoy to 9.8% mainly because of higher employee cost as a percentage of net sales. Consequently, profit for the quarter witnessed a decline of 53.3% on yoy basis to Rs. 6cr against our estimate of Rs. 5cr. However, given the company's promising outlook with a strong order book of Rs. 3,480 executable over a period of two and a half years, we remain positive on its growth outlook.

The stock is currently trading at a PBV of 0.5x. We maintain our Buy recommendation on the stock with a target price of Rs. 239 based on the target PBV of 0.6x for CY2014E.

Source : Equity Bulls

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