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8/6/2019 HCC Q1FY12 Result Update
http://slidepdf.com/reader/full/hcc-q1fy12-result-update 1/3
Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.Email: [email protected]
LONG TERM INVESTMENT CALL
Accumulat28 July 2011
Company Report | Q1FY12 Result Update
Q1FY12 Result Highlights
Hindustan Constructions Co. Ltd. (HCC) reported revenue andnet profit below Unicon’s expectation for Q1FY12. While
slowdown in order intake and execution was evident, higher
than expected interest charge and tax provision took toll on the
bottom-line of the company.
Revenue at INR 10.5bn grew ~6% YoY, below our estimates of INR
11.1bn. HCC, through better cost control was able to maintain its
operating profit margin. The operating profit margin marginally
grew by 40 bps to 13% compared to 12.6% during same quarter last
year.
Redemption of FCCB through fresh borrowings and higherworking capital cycle caused 61.5% spike in its interest cost to INR
933Mn. The tax provision for the quarter was 53% of PBT higher
than normal tax rate. This led to decline in its net profit by 90%
YoY to 29Mn
Order-book and Other Update
Order book:
The current order-book of the company is ~INR 170bn. This does
not include contract worth INR 19.4bn in the state of J&K to be
executed in JV due to legal issues. The current order-book is ~4x its
FY11 revenue. HCC is lowest bidder for two project worth INR
20.7bn. While Company saw weak order inflows during thequarter under review, the outlook for the sector remains weak due
to higher interest rate regime in the economy, leading to deferment
of capex by private players.
Lavasa:
Subject to the pre-conditions laid by the Expert Advisory
committee, the Ministry of Environment and Forests has agreed to
allow start of work at site. Lavasa Corporation Ltd. has approached
to the Mumbai High Court to hear the so called pre-conditions and
represent its case. The case is adjourned and its hearing is likely in
Q2FY12.
Stake sale at subsidiary level to raise cash:
HCC aims to raise ~INR 2.4bn through dilution of 14.5% stake in its
subsidiary HCC Concessions Ltd. (HCL) to Xander Group. HCL
designs, finances, builds and operates transport infrastructure.
Outlook and Valuations
At the current market price, stock trades at PE multiple of ~23x its
consensus FY13e. Given the higher interest rate regime, lower
order intake visibility over next 2-3 quarters and its RoE at ~5% in
FY13, we reduce our price target to INR 34/share, Accumulate
Industry Infrastructure
CMP (INR) 30
Target (INR) 34
Upside / (Downside) (%) 13
52 week High/Low (INR) 72 / 28
Market Cap (INR MN) 18,621
3M Avg. Daily Vol (‘000) 4,910
P/E (FY13e) 23
Shareholding Pattern (%)
Non
Institutions
32%
Institutions
29%
Promoters
39%
Stock Performance
25
35
45
55
65
75
J u l
A u g
S e p
O c t
N o v
D e c
J a n
F e b
M a r
A p r
M a y
J u n
H C C NSE Nifty
Performance (%)
1M
Month
3
Months
1
Year
Company -3.3% -17.0% -53.6%
Nifty -2.0% -5.9% 1.1%in Mn)
Particulars Actual Estimates
Total Income 10,579 11,106
EBIDTA 1,379 1,433
Reported PAT 29 78* Source: ACEEquity, Unicon Research
Analyst
Falgesh Sanghvi | [email protected]
8/6/2019 HCC Q1FY12 Result Update
http://slidepdf.com/reader/full/hcc-q1fy12-result-update 2/3
Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.Email: [email protected]
Financials (INR in mn)
Particulars Q1FY12 Q1FY11 FY11 YoY%
Income from Operations10,579 9,954 40,907 6.3
Operating Expenditure 9,200 8,696 35,534 5.8
Consumption of materials 2,891 2,967 11,973 (2.6)
Employees Cost 1,126 1,094 4,676 2.9
Construction Expenses 4,706 4,208 16,993 11.8
Other expenditure 478 427 1,892 12.0
EBITDA 1,379 1,258 5,373 9.7
EBITDA (%) 13.0 12.6 13.1 40 bps
Depreciation 392 347 1,527 13.1
EBIT 987 911 3,846 8.3
EBIT (%) 9.3 9.2 9.4 18 bps
Interest (Net) 933 577 2,899 61.5Other Income 7 31 170 (76.5)
PBT 62 364 1,117 (83.1)
Tax Expense 33 81 407 (59.5)
Tax Expense (%) 53.3 22.3 36.4
PAT 29 283 710 (89.9)
PAT (%) 0.3 2.8 1.7 -257 bps
EPS 0.05 0.47 1.17
Source: Company, Unicon Research
8/6/2019 HCC Q1FY12 Result Update
http://slidepdf.com/reader/full/hcc-q1fy12-result-update 3/3
Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.Email: [email protected]
Unicon Investment Ranking Methodology
Rating Buy Accumulate Hold Reduce Sell
Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%
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