Unity Infraprojects - 4QFY2013 Result Update - Angel Broking

For 4QFY2013, Unity Infraprojects (UIP) posted a disappointing set of numbers which were significantly below our estimates, both on the revenue and profitability fronts. The company secured orders worth ~Rs. 1,200cr in FY2013, taking the order book to Rs. 3,353cr (1.6x trailing revenue) as on 4QFY2013.

Disappointing quarterly performance: On the top-line front, the company reported a revenue of Rs. 692cr (our estimate was Rs. 833cr) in 4QFY2013, indicating a decline of 3.5% yoy. The company's EBITDA margins stood at 10.6% (down 190bp on a yoy basis), which were below our estimate of 11.7%. The interest cost came in at Rs. 40cr for the quarter, up 15.5% yoy. On the bottom-line level, UIP reported a PAT of Rs. 30cr for the quarter, a decline of 22.9% yoy and was below our estimate of Rs. 36cr owing to slower-than-expected execution and disappointing performance at the operating level.

Outlook and valuation: On the back of poor execution and muted order inflows, we have revised our revenue estimate for FY2014 to Rs. 2,146cr (our earlier estimate was Rs. 2,400cr) and introduce our revenue estimate of Rs. 2,339cr for FY2015. The stock is currently trading at a P/E of 2.6x and 2.5x our FY2014 and FY2015 diluted earnings estimates. We have used the SOTP method to value the stock. We value the construction business at a P/E of 3.0x FY2015 estimated earnings (~30% discount to larger companies under coverage), and BOT projects on a DCF basis at a CoE of 16%. We continue to maintain our Buy rating on the stock with a target price of Rs. 41.

Source : Equity Bulls

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