Wednesday, May 30, 2012

>RELIANCE INFRASTRUCTURE LIMITED: F2012: A Big Year for EPC


Quick Comment: Reliance Infrastructure reported

F4Q12 standalone revenue of Rs57.3bn (up 142% YoY), 
EBITDA of Rs6.2bn (up 136% YoY), PBT of Rs5.3 bn 
(up 30% YoY) and PAT of Rs6.6bn (up 84% YoY). 
Revenue was 30% higher than our estimate, but 
EBITDA was 9% below and PBT 11% below. The strong 
revenue growth, fueled primarily by EPC revenue of 
Rs43.8bn vs. our forecast of Rs28bn, was muted by the 
150 bps QoQ fall in EPC EBIT margins. While negative 
tax in F4Q (deferred tax assets created and previous 
year taxes included) pushed up PAT, full-year PBT of Rs 
23.3 bn was 3% below our estimate.




Consolidated revenue for the quarter was Rs71.4bn (up 
81% YoY), EBITDA was Rs5bn (up 48% YoY), and PAT 
was Rs4.1bn (up 28% YoY). Interest expense for the 
quarter was high; the infrastructure segment continued 
to contribute negative EBIT to the consolidated results. 
Consolidated book value was Rs918/sh at end F2012.




Key highlights:
• EPC: F2012 EPC revenue was Rs117bn (up 245%  
YoY). We believe significant progress made in 
Reliance Power’s Sasan and Samalkot projects was 
the key reason for the ramp-up in EPC revenue. The 
company expects similar revenue in F2013. The 
EPC order book currently stands at Rs173bn.




• Infrastructure: Infrastructure revenue for the quarter was Rs925mn (up 85% YoY). However, the

segment remained loss-aking with a negative EBIT  
margin of about 29% in the quarter. The company 
has invested Rs43.6 bn in the infra SPVs 
(Rs166/sh).




0.5x trailing consolidated P/B is undemanding, but  
lack of earnings triggers keeps us Equal-weight: 
Execution on Reliance Power and infrastructure projects 
will be critical for stock performance along with an 
improvement in the macro environment.






To read full report: RELIANCE INFRASTRUCTURE

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