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Elecon Engg.: Fair performance - Views on News from Equitymaster
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Elecon Engg.: Fair performance
May 28, 2008

Performance summary
  • Topline grows 14% YoY in FY08, 15% YoY in 4QFY08.
  • Operating margins expand by 0.3% YoY during the fiscal, largely owing to stock related adjustments, as raw material costs increase (as percentage of sales).

  • Net profits grow 22% YoY in FY08, 24% YoY in 4QFY08 - growth during the fiscal aided by higher other income. Actual profit figure in line with our estimates.

  • Board recommends dividend of Rs 1.5 per share (dividend yield of 1.2%).

Performance snapshot
(Rs m) 4QFY07 4QFY08 Change FY07 FY08 Change
Sales 2,848 3,285 15.3% 7,231 8,264 14.3%
Expenditure 2,459 2,844 15.7% 6,114 6,959 13.8%
Operating profit (EBDITA) 389 441 13.2% 1,117 1,305 16.8%
Operating profit margin (%) 13.7% 13.4%   15.5% 15.8%  
Other income 23 22 -5.6% 66 98 49.4%
Interest 58 85 47.6% 194 274 41.6%
Depreciation 34 36 7.2% 122 142 16.2%
Profit before tax 321 341 6.3% 867 987 13.8%
Extraordinary income/(expense) (6) -   (23) -  
Tax 130 111 -14.2% 295 315 6.7%
Profit after tax/(loss) 186 230 23.9% 549 672 22.4%
Net profit margin (%) 6.5% 7.0%   7.6% 8.1%  
No. of shares       30.9 92.9  
Diluted earnings per share (Rs)       5.9 7.2  
P/E ratio (x)         17.4  

What to expect?
At the current price of Rs 126, the stock is trading at a multiple of 11.6 times our estimated FY10 earnings. We shall update this analysis post receipt of further details from the company.

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Feb 19, 2018 01:51 PM

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