McNally Bharat Engineering - Catalysts at bay; Retain Hold - Emkay

- High interest costs (+52% yoy) mar standalone performance - (1) Revenues -1% at Rs7.2 bn (2) EBIDTA margins +80 bps to 8.0% - ahead estimates (3) PAT down 29% to Rs159 mn

- Consolidated level - net loss of Rs232 mn in FY13 - due to Rs350 mn impairment loss on MBE Cologne Engineering. Debt rises by 56% to Rs10.2 bn - DER at 2.6X.

- Order inflows momentum sustains - secures orders worth Rs8.5 bn. Standalone order book at Rs48 bn - or 2.2X revenues. Robust outlook for inflows - L1 in Rs7.3 bn

- Cut earnings estimates by 12% for FY14E and 5% for FY15E. Foresee no re-rating catalysts - barring for sustained momentum in inflows. Retain Hold with target of Rs90.

Source : Equity Bulls

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