Fourth quarter numbers are largely in line with our expectations on revenue and operating profit front but net profit is higher as a result of lower tax charges.

EBITDA margin has been expanded despite forex loss of Rs 258 mn for the quarter. Order backlog is up 17% y-o-y but down 25% sequentially. We estimated sharply lower order inflows during the quarter.

The stock has seen very sharp rise since our previous result update in January. The economic pessimism prevailing at the end of December ending quarter has changed into moderate optimism.

We believe the domestic investment scenario may improve from here on given resumption of fund flows and better credit availability.

As a result, our forecast assumptions now built in a slightly benign industrial scenario going ahead. However, the company’s current year earnings growth could still remain moderate given subdued order inflows.

In view of the sharp run-up in stock price, we downgrade the stock to REDUCE with a price target of Rs 300 (Rs 230 earlier).

Revenue growth forecast could be at risk if order inflows do not improve materially in the current year.