Narnolia Financial
Sadbhav Engineering (Hold)
CMP: ₹259.05
Target: ₹281
projects due to non availability of land.
EBIDTA grew by 2.2 per cent y-o-y with margin improved by 120 bps as the higher contribution from HAM projects. HAM has better margin than the EPC and BoT.
PAT was down by 59 per cent y-o-y to ₹29 crore due to higher tax of ₹53 crore. PAT margin for the quarter was 2.8 per cent compared to 6.3 per cent in QFY18.
Order book stood at ₹11,228 crore with the transportation sector order book contributing around 77 per cent.
Execution continues to remain impacted due delay in appointment date on key large projects and lower land availability on ongoing projects. Despite the muted revenue performance operating margin has expanded by 120 bps in Q4FY19 and 30 bps in FY19 backed by the execution of higher margin HAM projects. Going ahead revenue growth is likely to improve on account of execution pick on ongoing projects and appointment date of new projects.
Key risk: Delay in appointment date.