Unity Infra Projects 4Q FY 2013
Unity Infra Projects 4Q FY 2013
Unity Infra Projects 4Q FY 2013
June 4, 2013
Unity Infraprojects
Performance Highlights
Quarterly Highlights Standalone
Y/E March (` cr) Net sales Operating profit Net profit 4QFY13 692 73 30 4QFY12 717 89 39 3QFY13 551 76 28 % chg (yoy) (3.5) (18.2) (22.9) % chg (qoq) 25.6 (4.5) 6.3
BUY
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Infrastructure 215 888 1.6 52/26 55,287 2 19,546 5,919 UTIL.BO UIP@IN
`29 `41
12 Months
For 4QFY2013, Unity Infraprojects (UIP) posted a disappointing set of numbers which were significantly below our estimates, both on the revenue and profitability fronts. The company secured orders worth ~`1,200cr in FY2013, taking the order book to `3,353cr (1.6x trailing revenue) as on 4QFY2013. Disappointing quarterly performance: On the top-line front, the company reported a revenue of `692cr (our estimate was `833cr) in 4QFY2013, indicating a decline of 3.5% yoy. The companys EBITDA margins stood at 10.6% (down 190bp on a yoy basis), which were below our estimate of 11.7%. The interest cost came in at `40cr for the quarter, up 15.5% yoy. On the bottom-line level, UIP reported a PAT of `30cr for the quarter, a decline of 22.9% yoy and was below our estimate of `36cr owing to slower-than-expected execution and disappointing performance at the operating level. Outlook and valuation: On the back of poor execution and muted order inflows, we have revised our revenue estimate for FY2014 to `2,146cr (our earlier estimate was `2,400cr) and introduce our revenue estimate of `2,339cr for FY2015. The stock is currently trading at a P/E of 2.6x and 2.5x our FY2014 and FY2015 diluted earnings estimates. We have used the SOTP method to value the stock. We value the construction business at a P/E of 3.0x FY2015 estimated earnings (~30% discount to larger companies under coverage), and BOT projects on a DCF basis at a CoE of 16%. We continue to maintain our Buy rating on the stock with a target price of `41.
Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 62.7 6.4 2.5 28.4
3m 3.5
1yr 22.2
(0.9) (27.3)
FY2012 1,973 15.9 104 9.7 13.8 14.0 2.1 0.3 14.8 15.9 0.5 3.3 2.1 2,676 55.1
FY2013E 2,040 3.4 93 (10.6) 13.4 12.5 2.3 0.3 11.7 13.7 0.6 4.7 1.6 1,193 (55.4)
FY2014E 2,146 5.2 81 (12.0) 13.7 11.0 2.6 0.2 9.3 12.7 0.6 4.6 1.5 1,970 65.1
FY2015E 2,339 9.0 85 4.7 13.8 11.5 2.5 0.2 9.0 12.4 0.6 4.5 1.4 2,508 27.3
Viral Shah
022-39357800 Ext: 6842 [email protected]
% chg (yoy) (3.5) (1.4) (18.2) (190)bp 15.5 7.9 8.7 (38.2) (71.8) (22.9) (78)bp (22.9) (78)bp (22.9)
% chg (qoq) 25.6 30.5 (4.5) (333)bp (6.2) 9.8 0.3 (3.6) (38.1) 6.3 96bp 6.3 96bp 6.3
FY2013 2,040 1,766 274 13.4 153 22 24 123 30 93 4.5 93 4.5 12.5
FY2012 1,973 1,701 272 13.8 121 20 20 150 47 104 5.2 104 5.2 14.0
% Chg 3.4 3.8 0.7 35bp 25.9 9.3 17.5 0.8 (36.2) (10.6) (71)bp (10.6) (71)bp (10.6)
Execution falters
On the top line front, the company reported a revenue of `692cr (our estimate was `833cr) for 4QFY2013, indicating a decline of 3.5% yoy. Considering
UIPs order book of `3,353cr, we estimate it to report a revenue of `2,146cr and `2,339cr for FY2014 and FY2015, respectively.
22
10
68
Civil
Transportation
Irrigation & WS
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48.2
51
43.4
56.6
5.1 3.2
28
Civil
Transportation
West
East
South
North
Overseas
June 4, 2013
Segment Construction
Value per share (`) Basis 35 P/E of 3.0x one year rolling forward earnings 35 2 NPV at CoE of 16% 2 NPV at CoE of 16% 2 NPV at CoE of 16% 6 41
11 19 17 47 303
11.0 11.5
June 4, 2013
Investment argument
Comfortable order book-to-sales provides revenue visibility: The companys order book stands at `3,353cr (excluding L1 orders worth `815cr) as on 4QFY2013, thereby translating into a book-to-bill ratio of 1.6x trailing revenues. Well diversified order book with pan - India presence: UIP initially started off with a presence in Maharashtra and historically remained skewed towards projects in and around Maharashtra. It has come a long way in the last decade, making its presence felt across India by diversifying into new verticals and bidding for new projects across the country. As on date, 66% of UIPs order book constitutes orders from the North, South and East regions of the country. Foray into asset ownership model: From being a mere EPC player, UIP has forayed into asset ownership model through its wholly owned subsidiary Unity Infrastructure Assets Ltd and has bagged 3 BOT projects under its portfolio. The company has started construction activity in one of its road BOT project the Chomu-Mahla project and is in an advanced stage of achieving financial closure for the other two projects.
June 4, 2013
13,358 14,850 15,631 60,873 68,946 78,040 5,725 1,811 5,897 2,040 6,167 2,462 6,308 2,146 6,945 2,731 7,033 2,339
177.2 124.8
Company background
Unity Infraprojects Ltd (UIP) is a mid-sized engineering and construction company with focus on civil construction and infrastructure development in India. The company is the flagship unit of the Mumbai based KK Group of Companies. The company is focused in areas such as civil construction and infrastructure development projects. The company has three subsidiaries, namely Unity Realty and Developers Ltd, Unity Infrastructure Assets Ltd and Unity Telecom Ltd. UIP was incorporated as Unity Builders Ltd on April 9, 1997. The company changed its name to Unity Infraprojects Ltd on January 14, 2000. The company has gained credibility owing to its quick turnaround time, in-time and within-cost deliveries, organizational strength and financial stability and above all, following international standards.
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Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) Wcap cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 0.9 2.7 2.1 1.0 3.0 2.5 0.9 2.5 2.1 1.3 3.9 1.6 1.3 3.9 1.6 1.3 3.8 1.6 9.9 30 120 120 197 10.0 23 147 98 224 9.7 26 157 100 220 8.7 66 169 101 264 7.8 94 170 100 294 7.0 93 158 101 277 16.2 18.6 17.3 15.1 17.4 15.5 15.9 18.4 14.8 13.7 15.1 11.7 12.7 13.6 9.3 12.4 13.7 9.0 11.8 65.6 1.6 12.2 9.5 0.9 14.6 12.3 65.9 1.4 11.4 7.1 1.0 15.6 12.8 68.8 1.4 12.6 9.5 1.0 15.6 12.3 75.6 1.2 11.4 11.1 1.1 11.8 12.5 66.0 1.1 9.0 8.9 1.3 9.1 12.5 66.0 1.1 9.0 8.8 1.3 9.2 11.5 11.5 13.8 1.0 76.3 12.7 12.7 15.2 1.0 87.9 14.0 14.0 16.7 1.0 100.7 12.5 12.5 15.4 0.2 112.9 11.0 11.0 14.3 1.2 122.5 11.5 11.5 15.5 1.2 132.7 2.5 2.1 0.4 3.4 0.5 3.9 0.6 2.3 1.9 0.3 3.4 0.5 3.9 0.6 2.1 1.7 0.3 3.4 0.5 3.3 0.5 2.3 1.9 0.3 0.7 0.6 4.7 0.6 2.6 2.0 0.2 4.1 0.6 4.6 0.6 2.5 1.9 0.2 4.1 0.6 4.5 0.6 FY2010 FY2011 FY2012 FY2013E FY2014E FY2015E
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E-mail: [email protected]
Website: www.angelbroking.com
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Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered
Unity Infraprojects No No No No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns):
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