• Revenues were at INR 22 Bn for the quarter, down 4% YoY. Revenues increased to INR 71.27 Bn in FY10 from INR 66.75 Bn in FY09, aided by higher power transmission takings, which increased to IN 65.76 Bn from INR 52.83 Bn.
• Revenue from its consultancy operations rose 25% to INR 2691 Mn for FY10. This business contributed 4% to the revenues of the company.
• Revenues from the telecom businesse rose 5%, for FY10. This segment contributed 2% to the revenues of the company.
• The EBITDA margins for the quarter saw a dip of 294 bps YoY,
whereas the margins for the year saw a dip of 142 bps. This was mainly due to dip in revenues for the quarter and an increase in the company’s operating expenses, which increased by 4% for the quarter, YoY.• A 40% increase in depreciation was offset by the 50% reduction in the interest expenses for the quarter, YoY.
• Depreciation increased due to additional capex undertaken by the company. Power Grid increased its capital expenditure to INR 105 Bn in the FY10 from INR 81.6 Bn in the previous financial year. • The company’s net profit for the quarter was at INR 5,465 Mn down 11% YoY. PAT for FY10 grew by 21 % to INR 20,409 Mn.
Other Updates
The company has capex plans of INR 135 Bn for FY11, mainly for expanding and strengthening its transmission networks this year. Funds for this would be raised through a follow on public offering, which according to the management will happen in Q2FY11. Besides this internal resources and commercial borrowings will also be used to raise funds.
Outlook and Valuations
At a CMP of INR 103 , the stock is currently trading at 18x its FY11 consensus earnings estimate and at 2.7x its book value per share. Considering the equity dilution by the comp any for the investment for XII plan and rich valuation with stable earnings, we recommend “Hold” rating to the stock.
1 comment:
Nice company
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