Buy Jyoti Structures; target of Rs 215: Angel Broking

Angel Broking is bullish on Jyoti Structures and has recommended buy rating on the stock with a target of Rs 215 in its November 01, 2010 research report.

“Jyoti Structures (JSL) reported broadly in-line results for 2QFY2011, with revenue and net profit registering 14.7% and 19.0% yoy, respectively. The transmission, substation and rural electrification segments contributed 66%, 8% and 26% to 2QFY2011 revenues, respectively. Order intake increased 72% yoy to Rs 700 crore.”

“Revenues reported steady growth of 14.7% yoy to Rs 542 crore, while EBITDA margin rose by 26bp to 11.6%, resulting in 17.3% increase in EBITDA to Rs 63 crore. The growth in top-line coupled with stable EBITDA margins resulted in a 19% increase in PAT to Rs 25 crore. The proposal to raise ~Rs 300-400 crore through the issue of NCD with detachable warrants to finance its long-term working capital requirements is likely to be scrapped as the company now plans to fund the same through internal accruals. The proposal to issue sweat equity to the promoters has also been shelved.”

“Transmission EPC companies are expected to register increase in order inflow on the back of the ongoing investments in the domestic power sector. Over the next two years, PGCIL is expected to accelerate its capex schedule leading to higher order inflows for transmission EPC companies such as JSL. Apart from the transmission projects, JSL is also expected to garner significant portion of orders from RAPDRP and RGGVY schemes. At Rs 135, the stock trades at 10x and 8.2x FY2011E and FY2012E earnings, respectively. We maintain a Buy on the stock, with a target price of Rs 215,” says Angel Broking research report.
SOURCE: MONEYCONTROL.COM