Supreme Infrastructure India Ltd - Q4FY13 Result Update - Kantilal Chhaganlal

Supreme Infrastructure India Ltd (SIIL) has reported a revenue of Rs. 6533.8 mn in Q4FY13, with a modest revenue growth of 28.7% on Y-o-Y basis and by 18.7% on sequential basis. For FY13 SIIL's revenue of Rs. 19869.5 mn with growth of 31.9%. During the year SIIL's consolidated revenue grew by robust 35.1% to Rs. 23328.8 Mn.

During the quarter, SIIL's EBITDA margin remained under pressure due to rising operating cost. SIIL's EBITDA margin in Q4FY13 stood at 12.7% with a decline of 170bps on Y-o-Y basis, however it declined by 460bps on sequential basis. For FY13, EBITDA margin stood at 15.5% With a decline of 70bps on Y-o-Y basis. However consolidated EBITDA margin for the year stood at 15.6% Vs. 15.9% last year.

In Q4FY13, the company has reported a net profit of Rs. 284.7 mn, which grown by mere 8.5% on Y-o-Y basis, however it declined by 21% on sequential basis. SIIL's net profit margin stood at 4.4% which was down 80bps on Y-o-Y basis additionally impacted by rising interest cost. For FY13, net profit margin declined by 60bps to 5.5% on standalone basis and on consolidated basis it stood at 4.3% which was down 30bps.

At the end of FY13, SIIL's order book stood at Rs. 49209 mn. The company also has L1 position in orders worth Rs. 11236 Mn. During the year, the company added robust 31 new orders Worth Rs. 31334 6 Mn in Bridges Roads Water Power and Building segment. SIIL successfully completed 7 orders worth Rs. 4400 Mn across segments such as Roads, Power, Water and Railways in FY13. During the quarter, Manor-wada Bhiwandi road BOT project became operational and is expected to bring good cash flow in future.

SIIL presently has 10 BOT projects with unexecuted order book worth Rs. 15462 Mn with majority in key commercial corridors attracting huge industrial traffic to boost the operational cash flows of the company. Total equity for 10 BOT projects is Rs. 8125 Mn out of which the balance Rs. 765 Mn is to be infused over next 2 years. All current BOT projects are set to become operational by FY15.

Valuation:

At CMP of Rs. 206/ share the stock is trading at P/E of 2.9x of its FY14E EPS of Rs. 72, we expect that, the company will increase its revenue visibility with its continued focus on increasing the already robust order inflows in coming quarters, improving cash flow and debt reduction. We maintain 'BUY' with revised target price of Rs. 290/ share with construction business at Rs. 252/ share (3.5x P/E on FY14E EPS of Rs. 72/ share) and the investments in BOT projects is considered at 1X P/BV to value at Rs. 38.5/ share.

Source : Equity Bulls

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