Consolidated Construction Consortium (CCCL) posted a disappointing set of
numbers for 3Q FY 2012, as expected.
The CCCL reported a decline in revenue, with continued dismal performance at EBITDAM level, which along with interest cost burden led to loss at the earnings front. We are revising our
estimates further downwards for FY 2012 to factor in the poor performance on
the revenue front during the quarter; however, we are keeping our FY 2013
estimates unchanged.
We recommend Reduce on the stock. Decline in revenue, continued abysmal EBITDAM performance -> Loss at earnings level (as expected):
On the top-line front, the company posted a 10.0% y o y decline to CCCL 446.5 cr, lower than our estimate of Rs. 535.9 cr. On the EBITDAM front, CCCL continued its dismal performance and registered a dip of 5.1% y o y to 4.6%, which was higher than our estimate of 3.2%.
Interest cost came in at Rs.18.3 cr a y o y/q o q jump of 45.1% / 6.4%, respectively, and in-line with our
estimate of Rs. 18.6 cr. Owing to poor show at the revenue and margin level, along
with interest burden, the bottom line posted a loss of Rs. 3.2 cr in 3Q FY 2012 vs.
profit of Rs.16.7 cr in 3Q FY 2011 and against our estimate of loss of Rs. 5.2 cr.
Outlook and valuation:
CCCL has been posting erratic numbers on the EBITDAM front and consequently has been performing poorly on the earnings front as well since the past few quarters. However, in 3Q FY 2012, the company performed badly on the revenue front as well.
Further, slow-moving orders (Rs.1,315 cr, 22% of order book) and poor EBITDAM performance expected for another 3 to 4 quarters would result in subdued performance from CCCL going forward as
well.
Our target price for CCCL is Rs. 17/share based on 7.0x on its FY2013E EPS
of 2.4, implying a downside of 11% from current levels; hence, we recommend
Reduce on the stock.
Review by Angel Broking
numbers for 3Q FY 2012, as expected.
The CCCL reported a decline in revenue, with continued dismal performance at EBITDAM level, which along with interest cost burden led to loss at the earnings front. We are revising our
estimates further downwards for FY 2012 to factor in the poor performance on
the revenue front during the quarter; however, we are keeping our FY 2013
estimates unchanged.
We recommend Reduce on the stock. Decline in revenue, continued abysmal EBITDAM performance -> Loss at earnings level (as expected):
On the top-line front, the company posted a 10.0% y o y decline to CCCL 446.5 cr, lower than our estimate of Rs. 535.9 cr. On the EBITDAM front, CCCL continued its dismal performance and registered a dip of 5.1% y o y to 4.6%, which was higher than our estimate of 3.2%.
Interest cost came in at Rs.18.3 cr a y o y/q o q jump of 45.1% / 6.4%, respectively, and in-line with our
estimate of Rs. 18.6 cr. Owing to poor show at the revenue and margin level, along
with interest burden, the bottom line posted a loss of Rs. 3.2 cr in 3Q FY 2012 vs.
profit of Rs.16.7 cr in 3Q FY 2011 and against our estimate of loss of Rs. 5.2 cr.
Outlook and valuation:
CCCL has been posting erratic numbers on the EBITDAM front and consequently has been performing poorly on the earnings front as well since the past few quarters. However, in 3Q FY 2012, the company performed badly on the revenue front as well.
Further, slow-moving orders (Rs.1,315 cr, 22% of order book) and poor EBITDAM performance expected for another 3 to 4 quarters would result in subdued performance from CCCL going forward as
well.
Our target price for CCCL is Rs. 17/share based on 7.0x on its FY2013E EPS
of 2.4, implying a downside of 11% from current levels; hence, we recommend
Reduce on the stock.
Review by Angel Broking
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