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Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Infrastructure 517 0.46 93.0/27.3 54,432 2 18,197 5,482 CCON.BO CCCL@IN
`28 -
CCCL has witnessed yet another weak quarter on the numbers front. The companys top line came in flat mainly on account of slow-moving infrastructure orders. Further, the company has continued its poor performance on the EBITDA margin front, as expected. CCCLs bottom-line performance was also disappointing due to sedate top-line growth, lower margin and higher interest cost and tax provisioning. We are revising our estimates downwards for FY2012 and FY2013 to reflect the same and are downgrading our target multiple to 8x from 9x. Going ahead, we expect CCCLs margin to remain under pressure. However, given the sharp fall in the share price, we maintain our Neutral view on the stock. Poor show on all fronts: For 1QFY2012, CCCL posted flat top line to `506.9cr (`508.0cr), registering a decline of 0.2% yoy, against our estimates of `559.0cr. This disappointment was on account slow-moving infrastructure orders. On the operating front, the company continued its dismal performance, more than our estimates, by posting a 342bp yoy decline in its EBITDAM to 4.8%, against our expectation of 250bp decline. Interest cost grew to `15.5cr (`10.5cr), up 46.6% yoy, due to high interest rates and as the company has shifted to cash credit arrangements instead of mobilisation advances. Owing to these reasons, along with higher tax provisioning (58.3%), earnings declined by 96.9% yoy to `0.6cr (`17.9cr), against our estimate of 57.1% decline.
Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 50.7 13.8 13.4 22.1
3m (4.9)
1yr 1.1
Outlook and valuation: CCCL has been consistently disappointing on the top-line front and posting erratic numbers on the EBITDAM front since the last few quarters. The order inflow is showing signs of revival, but the critical execution leg is dragging the companys performance. CCCL has always been commanding a premium over peers due to its superior return ratios, which are now headed southwards. Hence, we have revised our numbers downwards to factor in the same. Our revised fair value for CCCL is at current levels of `28/share; hence, we maintain our Neutral view on the stock. Key financials (Consolidated)
Y/E March (` cr) Net sales (incl op. income) % chg Adj. net profit % chg FDEPS (`) EBITDA margin (%) P/E (x) RoAE (%) RoACE (%) P/BV (x) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research
(41.0) (67.1)
FY2010 1,976 7.3 91.6 26.6 5.0 9.1 5.6 16.6 19.3 0.9 0.3 3.8
FY2011 2,199 11.3 46.9 (48.8) 2.5 7.0 10.9 7.7 13.2 0.8 0.4 5.6
FY2012E 2,362 7.4 27.8 (40.8) 1.5 6.3 18.4 4.4 10.9 0.8 0.4 6.6
FY2013E 2,646 12.0 65.8 136.8 3.6 7.3 7.8 9.8 12.4 0.7 0.4 5.7
Shailesh Kanani
022-39357800 Ext: 6829 shailesh.kanani@angelbroking.com
Nitin Arora
022-39357800 Ext: 6842 nitin.arora@angelbroking.com
1QFY12 506.9 482.3 24.6 4.8 15.5 3.2 1.2 0.0 7.0 4.1 2.9 2.4 0.6 0.1 0.0
1QFY11 508.0 466.0 42.0 8.3 10.5 2.9 1.4 0.9 29.1 10.3 18.8 0.9 17.9 3.5 1.0
4QFY11 643.0 620.5 22.5 3.5 12.0 3.5 0.9 0.0 7.8 3.3 4.5 3.0 1.5 0.2 0.1
% Chg (yoy) (0.2) 3.5 (41.5) (342)bp 46.6 12.9 (15.6) (75.8) (60.1) (84.4) (96.9) (340)bp (96.9)
% Chg (qoq) (21.2) (22.3) 9.4 130bp 28.6 (7.0) 31.5 (10.4) 22.7 (34.9) 0.0 (63.4) (10)bp (63.4)
FY2011 2136.7 1985.6 151.0 7.1 47.3 12.9 5.0 0.7 96.6 33.8 62.9 12.2 50.7 2.4 2.7
FY2010 1950.0 1767.0 183.0 9.4 31.3 10.0 6.3 0.0 148.0 49.1 98.9 5.4 93.5 4.8 5.1
% Chg 9.6 12.4 (17.5) (230)bp 51.3 28.8 (19.3) (34.7) (31.2) (36.4) 0.0 (45.7) (240)bp (45.7)
4.5
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
4QFY11 4QFY11
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
1QFY12
1QFY12
Change in estimates
We are revising our revenue estimates to `2,362cr (`2,433cr) and `2,646cr (`2,946cr) for FY2012 and FY2013, respectively, owing to slow-moving orders of ~`1,500cr (24.3% of the overall order book). On the margin front, we are factoring in a marginal dip in OPM to 6.3% (6.4%) for FY2012, as the company has acknowledged that margin pressure is likely to continue for the next 56 quarters. Further, with rising interest cost due to reasons mentioned above, our bottom-line estimates have been revised downwards to `27.8cr (`47.1cr) and `65.8cr (`77.8cr) for FY2012 and FY2013, respectively.
FY2013 (2.9) (1.4) (41.1) 2,946.1 7.3 77.8 2,646.1 7.3 65.8 (10.2) (15.4)
Revised estimates Variation (%) Earlier estimates Revised estimates Variation (%) 2,362.1 6.3 27.8
Exhibit 10: Return ratios decline on low OPM and passive rev. growth
40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 FY2008 FY2009 FY2010 FY2011
RoACE (%)
35.3
27.8
17.5
14.9
16.6 7.7
RoAE (%)
1.5 3.6
13,217 15,860 18,708 9,585 10,992 5,856 2,602 5,373 3,272 2,069 4,908 6,939 2,865 6,721 3,587 2,632 6,467
- Neutral
- Neutral
1,726 2,030
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 (%) ROACE (Pre-tax) Angel ROIC (Pre-tax) ROAE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) W. cap cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 0.1 0.2 14.2 0.1 0.5 6.5 0.3 0.9 5.2 0.6 2.3 2.8 0.7 3.2 1.9 0.9 3.1 2.1 19.2 120 2 77 62 14.4 143 2 93 73 11.3 169 2 100 97 10.7 185 2 94 121 9.3 193 1 95 132 8.2 190 1 93 130 35.3 43.6 27.8 17.5 20.8 14.9 19.3 23.3 16.6 13.2 15.0 7.7 10.9 11.7 4.4 12.4 13.4 9.8 11.1 0.7 3.9 31.3 6.9 0.1 33.7 6.5 0.7 3.2 13.6 7.5 0.1 14.3 8.5 0.6 2.7 15.0 7.8 0.2 16.5 6.3 0.6 2.4 9.4 8.0 0.4 9.9 5.5 0.7 2.1 7.6 9.0 0.6 6.7 6.4 0.7 2.1 9.0 8.4 0.8 9.5 6.2 4.8 5.1 0.5 24.6 3.9 3.9 4.4 0.5 27.9 5.0 5.0 5.6 0.5 31.9 2.5 2.5 3.3 0.5 34.0 1.5 1.5 2.5 0.6 34.9 3.6 3.6 4.8 0.6 37.8 5.7 5.4 1.1 1.8 0.4 3.2 0.9 7.1 6.3 1.0 1.8 0.3 4.5 0.8 5.6 5.0 0.9 1.8 0.3 3.8 0.7 10.9 8.4 0.8 1.8 0.4 5.6 0.8 18.4 10.9 0.8 2.0 0.4 6.6 0.8 7.8 5.7 0.7 2.0 0.4 5.7 0.8 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E
10
E-mail: research@angelbroking.com
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
CCCL No No No No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns):
11