Sadbhav Engineering Ltd. (SEL) delivered a muted 3QFY16, as revenue/EBITDA was 15/17% below our estimates. EBITDA margins contracted 36bps YoY (102bps QoQ) to 9.8% because of the VAT on the Haryana project (higher other expenses), which offset the 189bps YoY expansion in gross margins. Net profit was 26% below expectations.