X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Pratibha Inds: Healthy order inflows - Views on News from Equitymaster
MidCapSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Pratibha Inds: Healthy order inflows
Feb 22, 2012

Pratibha Industries has announced the third quarter financial results of financial year 2011-12 (3QFY12). The company has reported 44.2% YoY and 34.7% YoY growth in sales and net profits respectively. Here is our analysis of the results.

Performance summary
  • Top line increased by 44.2% YoY during 3QFY12. Revenue growth was led by 55.9% YoY growth in the Infrastructure & Construction (I&C) segment. However, revenues from manufacturing segment declined 48.1% YoY.
  • Operating profits increased 29.5% YoY during 3QFY12. However, operating margins declined by 150 bps due to increase in employee expenses and other expenditure as a percentage of sales.
  • Net profits increased 34.7% YoY due to strong performance at the topline level and increase in other income.
  • Currently, the order book of the company stands at Rs 61.5 bn. The company has bagged orders worth Rs 33 bn year to date. Approximately 60% of the orders are from the infrastructure segment while balance from the buildings segment.

Standalone financial snapshot
(Rs m) 3QFY11 3QFY12 Change 9MFY11 9MFY12 Change
Sales 2,740 3,952 44.2% 8,234 9,832 19.4%
Other operating income 12 12 -0.6% 41 64 58.4%
Expenditure 2,331 3,418 46.6% 7080 8457 19.4%
Operating profit (EBDITA) 422 546 29.5% 1,194 1,440 20.6%
Operating profit margin (%) 15.3% 13.8%   14.4% 14.6%  
Other income - 40   1 50 4991.1%
Interest 195 278 42.4% 489 627 28.2%
Depreciation 37 51 37.4% 106 138 29.8%
Profit before tax 190 258 35.6% 600 725 20.8%
Tax 49 67 38.4% 159 184 15.4%
Profit after tax/(loss) 142 191 34.7% 440 541 22.8%
Net profit margin (%) 5.1% 4.8%   5.3% 5.5%  
No. of shares (m)         99.4  
Basic & diluted earnings per share (Rs)         5.4  
P/E ratio (x) *         6.2  
* On a trailing 12-months basis

What has driven performance in 3QFY12?
  • Net sales increased 44.2% YoY in 3QFY12 led by I&C segment. Revenues from I&C segment increased 55.9% YoY as execution pace amongst the ongoing projects gathered momentum. However, revenues from the manufacturing segment declined 48.1% YoY.

    Segmental Break up
    (Rs m) 3QFY11 3QFY12 Change 9MFY11 9MFY12 Change
    Infrastructure & Construction            
    Revenue 2,489 3,880 55.9% 7,625 9,510 24.7%
    % share 88.9% 95.1%   90.5% 93.2%  
    PBIT margin 15.3% 12.9%   13.7% 13.6%  
    Manufacturing            
    Revenue 310 161 -48.1% 799 646 -19.1%
    % share 11.1% 3.9%   9.5% 6.3%  
    PBIT margin 6.8% 6.2%   9.6% 7.7%  
    Others            
    Revenue - 40   1 50 4991.1%
    % share NA 1.0%   0.0% 0.5%  
    PBIT margin NA 100.0%   100.0% 100.0%  
    Total 2,799 4,081 45.8% 8,425 10,206 21.1%
    Less: Inter-segment revenue 46 77   149 260  
    Total            
    Revenue 2,753 4,004 45.4% 8,276 9,947 20.2%
    PBIT margin 14.6% 13.7%   13.6% 14.0%  

  • Operating profits increased 29.5% YoY in 3QFY12. However, they have not kept pace with the topline growth as the company hired new employees which resulted in an increase in personnel expenses. As a result, operating expenses increased to 86.2% (as a percentage of revenues) in 3QFY12 from 84.7% in 3QFY11.

  • Bottom line registered 34.7% YoY growth on the back of strong performance at the operating level. Increase in other income also boosted profitability growth. Nonetheless, interest expenses increased 42.4% YoY thereby impacting profits.

What to expect?
It may be noted that in an environment where majority of the construction companies are facing dry spells in order inflows Pratibha Industries has managed to add orders of approximately Rs 33 bn till date. As such the company's order book now stands at Rs 61.5 bn. This provides sufficient revenue visibility for the next 2-3 years. Further, the company also plans to enter into the Oil & Gas sector (higher margin business) which should further upgrade its margin profile. Thus, considering the strong growth prospects and attractive valuations, we maintain our positive view on the stock.

To Read the Full Story, Subscribe or Sign In


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

PRATIBHA INDS SHARE PRICE


Feb 23, 2018 (Close)

TRACK PRATIBHA INDS

  • Track your investment in PRATIBHA INDS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

PRATIBHA INDS 5-YR ANALYSIS

COMPARE PRATIBHA INDS WITH

MARKET STATS