Simplex Q2FY17 operational performance was better than expectations. Though, revenues of Rs 12.63bn (down by 11% YoY) was lower than estimate of Rs 13.68bn, EBITDA of Rs 1.59bn (-4% YoY) was in-line with our estimate of Rs 1.57bn as the margin came higher at 12.7% (+101 bps YoY) vs. estimate of 11.5%. PAT declined 31% YoY to Rs 178mn primarily led by decline in EBITDA and higher tax rate. Going ahead, we expect muted revenue growth during FY17-18E due to cash crunch in the system and working capital stress. However, decline in interest cost (led by reduction in debt) to drive 42% PAT CAGR during FY16-18E. However, valuations look fair. Maintain Hold.