Ador Welding - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 418; MCap: Rs. 569 crore)

Ador Welding reported a reasonable set of Q4FY21 numbers. Revenue grew by 15.6% aided by rebound in consumable & equipment business while project engineering business reported positive EBIT. It registered EBITDA growth of 40% on YoY. However, Awl has reported 24 crore exceptional items towards provision for doubtful receivables and doubtful debts across business segments, requiring more clarity.

Q4FY21 Earnings Summary

- Ador Welding (AWL) reported consolidated revenues at Rs. 161.7 crore which grew by 15.6% on YoY and 19.6% on QoQ basis led by better performance in consumables and equipment business

- For Q4FY21, Consumables segment revenue came in at Rs. 122.2 crore (which contributes ~76% to total revenue), which grew by 14.3% on YoY and 14% on QoQ basis, Equipment & automation segment grew by 49.6% to Rs. 26.6 crore on YoY basis. While Project & Engineering Business revenue declined by 19.2% to Rs. 13.1 crore. EBIT margin for Consumable business declined by 330bps to 9.9%, Equipment & Automation EBIT margin improved to 17.4% while Project Engineering business turned EBIT positive with 7.8% Margin (Vs. Rs. 8.2 crore EBIT loss in Q3FY21)

- EBITDA came in at Rs. 15.6 crore which grew by 46% on YoY basis and 116% on QoQ basis with marginal improvement in gross margins and controlled other operating expenses. EBITDA margin improved by 200bps to 9.6% on YoY. While, gross margins for Q4FY21 improved marginally by 20 bps to 29.1% on QoQ basis

- For Q4FY21, AWL has reported Exceptional item of Rs. 24 crore, out of which Rs. 8.5 crore towards provision against doubtful receivables from variable tax authorities in Consumable and Equipment business and it provided Rs. 15.5 crore towards projects business as provision for doubtful debt and bad debt written off, significantly impacting reported PAT

- While Adj. PAT came in at ~Rs. 10.0 crore which grew by 44.9% on YoY basis, partly aided by higher other income and turnaround in projects business

Shares of ADOR WELDING LTD. was last trading in BSE at Rs.478.85 as compared to the previous close of Rs. 418.5. The total number of shares traded during the day was 32491 in over 3109 trades.

The stock hit an intraday high of Rs. 493.95 and intraday low of 401.3. The net turnover during the day was Rs. 14950702.

Source : Equity Bulls

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