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BGR Energy Systems - Q1FY14 Result Update - Kotak
Posted On : 2013-08-11 23:00:09( TIMEZONE : IST )
- Revenues of the company for Q1FY14 reported a growth of 34% YoY and was better than our estimates.
- Operating margins witnessed a decline due to higher proportion of EPC project execution during the current quarter in comparison with Q1FY13.
- Net profit performance was better than our estimates due to improved execution.
- At current price of Rs 94, stock is trading at 4.7x P/E and 6.1x EV/EBITDA on FY14. We had estimated interest rates to come down during the quarter but due to continued high interest rates, we now revise our profit estimates downwards. We also reduce our valuation multiples on the company due to lack of revival in order inflows in the power sector along with leadership issues. We recommend REDUCE on the stock since we believe that in near term, lack of order inflows and leadership issues may continue to weigh on the stock. Performance is likely to improve once its execution ramps up from the NTPC bulk tenders in the medium to long term.
