Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Opinion / Online-views/  Religare maintains BUY on Punj Lloyd
BackBack

Religare maintains BUY on Punj Lloyd

Religare maintains BUY on Punj Lloyd

Premium

Punj Lloyd group has posted a healthy 38% Y-o-Y growth in net sales for Q4FY08, with full fiscal sales increasing by 51%. Higher revenues were fuelled by increased order booking across verticals.

The results were marred, however, by the auditor’s qualification regarding losses of Rs3.1 billion expected on a contract being executed by Simon Carves, which was not accounted for during the quarter. Management has stated that the cost escalation on this project would be negotiated with the client, leading to project breakeven (on which we have based our estimates).

The group’s order backlog currently stands at Rs196 billion (2.5x FY08 sales), including SEC’s share of Rs68.5 billion. Consolidated EBITDA margins improved slightly to 10.6% and 8.3% for Q4FY08 and FY08 respectively, while PAT rose 32% Y-o-Y during the quarter to Rs1.2 billion and 63% for the year to Rs3.6 billion.

We have marginally revised our estimates for FY09 and FY10, leading to a decline in our PAT figures by 7% and 10% respectively. We have also switched from a P/E-based valuation to the DCF approach as we believe the latter presents a more accurate picture of the company’s future growth prospects.

Our DCF-based valuation gives us a fair value of Rs364 for the core business, while the Pipavav Shipyard stake value remains unchanged at Rs47. We have arrived at a price target of Rs411 from Rs569 previously and maintain a BUY on the counter.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 08 Jun 2008, 01:56 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App