ICICI Direct's research report on Sadbhav Engineering
Sadbhav Engineering’s (SEL) topline declined 7.5% YoY to Rs 1,021.7 crore, below our estimates of Rs 1,146.3 crore possibly on account of weak execution in Q4FY19. EBITDA margin expanded 118 bps YoY to 12.4%, slightly better than our estimates of 12.0%. PAT declined sharply by 58.7% YoY to Rs 28.9 crore in Q4FY19 on account of higher tax expenses (64.6% in Q4FY19 vs. nil tax expense in Q4FY18). However, at PBT level it grew 16.9% YoY to Rs 81.6 crore (our estimate: Rs 93.2 crore). Hence, we maintain our BUY recommendation on the stock with an SOTP based target price of Rs 300/share.
Outlook
We now value SEL’s 69% stake in SIPL at Rs 105/share and EPC business at Rs 196/share (9.0x FY21E EV/EBITDA implying PE multiple of 13.5x FY21E EPS).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!