bgr energy systems ltd - q4fy11 result update

8/6/2019 BGR Energy Systems Ltd - Q4FY11 Result Update

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Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.

Email: [email protected]

ONG TERM INVESTMENT CALL

Hold30 May 2011

Company Report | Q4FY11 Result Update

Project Execution remains on track, Order inflows disappoint

BGR Energy Systems Ltd (BGRL) reported revenue of INR 14.6 bn for

Q4FY11, down 12% on YoY basis. Revenue for the year was at INR 47.6

bn, up 55% on YoY basis. Strong revenue growth for the year was driven

primarily by on time execution of the Kalisindh (70% complete) and

Mettur (80% complete) projects.

EBITDA for the quarter was INR 1,674 mn, down 4% on YoY basis.

EBITDA margin for the quarter was 11.45%, which saw an improvement

of 848 bps. EBITDA for the year was INR 5.5 bn, up 58%, YoY. EBITDA

margin for the year saw an improvement of 215 bps to 11.57%.

PAT for the quarter was INR 984 mn, down 9%, YoY. PAT margin

improved by 311 bps to 6.73%. PAT for the year was INR 3.2 bn, up 61%,

YoY. PAT margin saw an improvement of 413 bps to 6.81%.

Order backlog stands at INR 79.7 bn (down 21.8%, YoY). Subdued order

inflow (INR 29 bn) in FY11 has resulted in depletion of companys order

book (Order book at the end of FY10 was INR 102 bn). The current order

book provides very little earnings visibility for FY13 & FY14.

BGRL has given a revenue growth guidance of 15% for FY12 and expectsthe order inflows to improve significantly in Q2FY12 & Q3FY12. The

management cited that the company has already submitted bids to the

tune of about INR 200 bn across the EPC, BTG and BoP segments.

The company has already acquired land for its BTG venture with Hitachi

and will achieve financial closure in coming three months. BGRL has

invested INR 1.5 bn in FY11 and intends to further invest INR 2.5 bn in

FY12E. The total project cost for the boiler & turbine generators unit

stands at INR 44 bn.

Outlook & Valuation

Issues related to environmental clearances and coal linkage which could

delay the award process could potentially strain revenue growth and

visibility in FY13E. Furthermore, increased competition in the BoP as well

as BTG space may have a negative impact on margins. Key upside

triggers for the stock would be a positive outcome on the Rajasthan

project as well as the NTPC bulk tender decision in BGRLs favor.

Though the stock has corrected sharply, sustained order inflows in FY12

could re-rate the stock. We revise our rating from Buy to Hold

considering weak order inflows and high competition in the power BoP

& BTG space. We downgrade our FY12E EPS to INR 48. At CMP the

stock trades at 9.9x our earnings estimate. Hold for a target of INR 528.

Industry Power

CMP (INR) 477Target (INR) 528

Upside / Downside (%) 10

52 week High/Low (INR) 950/401

Market Cap (INR Mn) 34,421

3M Avg. Volumes (000s) 678.82

P/E (FY12e) 9.9

Shareholding Pattern (%)

Promoters

81%

FII

2%

DII

5%

Others

12%

Stock Performance

350

450

550

650

750

850

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

BGRL NSE Nifty Performance (%)

1 Month 3 Months 1 Year

BGR -13.0 11.6 -19.5

NIFTY -5.3 -0.8 8.1

(INR Mn)

Particulars Actual Estimates

Total Income 14616 13656

EBIDTA 1674 1578

Reported PAT 984 897* Source: Bloomberg, Unicon Research


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Financials

(INR Mn)

Q4FY11 Q4FY10 YoY FY11 FY10 YoY

Net Sales / Income from Operations 14616 16598 -12% 47608 30738 55%

Expenditure 12943 14846 -13% 42101 27257 54%

EBITDA 1674 1752 -4% 5507 3480 58%

EBITDA margin (%) 11.45% 10.56% 848 bps 11.57% 11.32% 215 bps

Depreciation 70 31 129% 168 98 72%

Other Income 17 39 -56% 86 202 -57%

Interest 183 118 55% 605 538 12%

PBT 1438 1642 -12% 4820 3047 58%

Tax expense 454 559 -19% 1578 1037 52%PAT 984 1083 -9% 3242 2010 61%

PAT margin (%) 6.73% 6.53% 311 bps 6.81% 6.54% 413 bps

Earnings per Share (EPS) 13.63 15.04 -9% 44.97 27.92 61%

Segment Revenue Q4FY11 Q4FY10 YoY FY11 FY10 YoY

Capital Goods 1213 824 47% 2661 1682 58%

Construction and EPC Contracts 13359 15747 -15% 44814 29010 54%

Total 14573 16571 -12% 47475 30692 55%Source: Company, Unicon Research


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Unicon Investment Ranking Methodology

Rating Buy Accumulate Hold Reduce Sell

Return Range >= 20% 10% to 20% -10% to 10% -10% to -20%

bgr energy systems ltd - q4fy11 result update

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