Comments
Anand Rathi
CMP: ₹347
Target: ₹423
a) The Railways and the civil segments saw strong order inflows, leading to 68 per cent y-o-y growth in orders. In Railways, traction was seen in track-laying, signalling, OHE and station building. Management said its Railways business would touch ₹2,500 crore in FY20 driven by the sturdy about ₹7,000 crore order backlog. Management expects its civil business to touch ₹4,000 crore in the next 3-4 years.
b) With soft tendering by PGCIL, orders from SEBs and the Green Energy Corridor (GEC) are expected. Management said that States such as Tamil Nadu, Rajasthan, Gujarat, West Bengal and Odisha would drive T&D capex. With the recent delay in awarding of GEC orders, fast-track tendering is expected in the next 2-3 weeks. International T&D will continue strong with traction from West Asia, Africa and the Far East.
Outlook: Though sales growth is expected to be strong, margins are expected to hold at current levels. The company expects order inflows of ₹14,000 crore in FY20 and a similar figure in FY21. Despite the strong order book and L1 for ₹2,500 crore, we expect revenue and PAT CAGRs over FY19-22 of respectively 10 per cent and 13 per cent.
Risks: Slowdown in ordering and pace of execution.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.