Buy

Charting the course of growth

SCI has reported weak set of numbers for Q2FY18 despite improvement in macroeconomic environment and up-trend in shipping cycle. This is primarily due to poor strategy adopted by the company in placing its ships, improper capex plan and poor bargaining with customers. Sales was reported at Rs 8.08 bn (+6.5% YoY and -6.5% QoQ) with weakness in the key tanker segment despite upcoming winter in the west. This dragged the overall EBIDTA margin to 15.49% (-200 bps QoQ and -380 bps YoY) which is the lowest in the last 8 quarters. Consequently...

Revenues came in | 231.7 crore (including government grants), up 230% YoY. We estimate revenues of | 239.2 crore for the quarter EBITDA came in at | 12.5 crore (I-direct estimate: | 9.6 crore) Interest expenses came in at | 151.7 crore, down 7.8% QoQ. The company reported one-time (exceptional) cost of | 163.2 crore towards right of recompense payable to the lenders on exit from CDR. Subsequently, the overall PAT performance continued to remain stressed at a loss of | 230.4 crore...

ICICI Securities Ltd | Retail Equity Research Revenues for Reliance Defence (RDEL) more than doubled YoY (up 25% QoQ) to | 122.7 crore (I-direct estimate: | 93 crore). The company reported a second consecutive quarter of growth, indicating better execution of the existing order book. Revenues in Q2FY17, Q3FY16 were at | 98 crore and | 50.5 crore, respectively Improved execution coupled with contained costs led to positive EBITDA for a third consecutive quarter. EBITDA posted a profit of | 4.4...

The positive EBITDA performance was completely offset by continued higher interest expense which during the quarter grew 13% YoY to | 133.2 crore. Subsequently, PAT for Q1FY17 came in at a loss of...

Reliance Defence’s (RDE, erstwhile Pipavav Defence) Q1FY17 revenues were | 70.3 crore (vs. I-direct estimate: | 120 crore). Revenues in Q4FY16, Q1FY16 were at | 94.7 crore, | 107 crore, respectively. Lower execution in the quarter led to decline in operating expenses resulting in positive EBITDA of | 1.8 crore (I-direct estimate: positive EBITDA of | 1 crore). Lower employee expenses coupled with reversal of costs for revenue recognised earlier, accelerated EBITDA growth. The positive EBITDA performance was completely offset by higher interest expense that during the quarter grew 18%YoY (7% QoQ) to | 132 crore. Subsequently, PAT for Q1FY17 was at a loss of | 135 crore (I-direct estimate: loss of | 160 crore).

RDE’s management expects total naval defence order inflow of ~| 112500 crore for private shipyards in the next 10 years. Technological tieups with a slew of foreign partners SAAB, DCNS, Babcock, etc, position BDE at a vantage point. Near term financials continue to remain subdued. However, the sector opportunity justifies a valuation of 2.5x FY18 P/BV. A slower-than-expected ramp up in the order book results in a downward revision of our target price to | 68. We have a BUY recommendation.

Buy Great Eastern Shipping Company Ltd CMP at Rs. Rs. 335 and Add on Dips of Rs. 300-310 for the Sequential Targets Rs. 380-427.

ICICI Securities Ltd | Retail Equity Research Dredging Corporation of India's (DCI) Q4FY16 revenues sequentially grew 9% (down 8% QoQ) to | 177 crore vs. our expectation of | 184...

ICICI Securities Ltd | Retail Equity Research Reliance Defence & Engineering's (RDE, erstwhile Pipavav Defence) Q4FY16 revenues were at | 94.7 crore (vs. I-direct estimate: | 67...

We recently met the management of Dredging Corporation of India (DCI), to get an insight into the various initiatives taken by the government to promote shipping and coastal activities in India and DCI's role in the...

DCI's operating revenue decline by 5% and up by 3% on Y-o-Y and Q-o-Q basis respectively during the Q4FY15.EBITDA has seen massive jump by 54% and 91% on Y-o-Y and Q-o-Q basis respectively during the quarter because repair and maintenance has dropped by 94% and 99% on Y-o-Y and Q-o-Q basis respectively.

Dredging Corporation of India (DCI) is a public sector company providing integrated dredging services for major ports, non-major ports, the Indian Navy and ship yards in the form of maintenance dredging, capital dredging, reclamation, hydrographic surveys and beach nourishment in India.