Saturday, March 20, 2010

Stock Idea: Sunil HiTech

This company is in the business of fabrication, erection and commissioning related works required for power plants. Financially, the company has been a consistent performer but Q3 ended 31st Dec 2009 was not very good. A fall in topline and despite rationalization of costs, net profit remained low.
For Q3FY10, QoQ, net revenue was down 23% at Rs.154.61 crore and net profit fell 49% at Rs.6.39%. OPM margin was highest during the fiscal at 14.59%.
A look at the 9MFY10 performance shows that net sales was at Rs.550.07 crore v/s Rs.598.21 crore posted in FY09. Net profit was at Rs.27.46 crore compared to Rs.10.30 crore for FY09. Clearly, FY10 will end on a much higher note.
What is noteworthy in the company is its high order intake. In Q3FY10, it won Rs.642 crore orders which was 45.215 of its net order book. Its pending order book till date stands at Rs.2062 crore, which is pending to be executed in 24-30 months. The company is diversifying from the current stream of business and getting into whole time balance of plant (BOP) contracts for thermal power plants. This new diversification came through when it won 250 MW 488 crore order from Mahagenco. Its other big orders are from Koradi Thermal Power Station order and another from L&T for 193 crore.
In FY11, the company expects to have a topline of around Rs.1000 crore and net profit margin, it expects to maintain at 4.5% levels. The company will take a while to establish itself as a full fledged EPC, managing the entire plan know-how. But it surely puts the company into a league where it can now bid for projects above Rs.500 crore but within Rs.1000 crore.
Source: Internet ( by S P Tulsian)

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