Sadbhav Engineering Ltd. share price target

Maintain BUY with a TP of Rs 360/sh. SEL reported robust 1QFY18 financial performance with RPAT beat of 31%, led by strong revenue growth in transportation segment (47% YoY). Revenue is expected to ramp up further, as execution of three (out of seven) HAM projects has begun, one more projects will start contributing from 2QFY18E and the balance three by 3QFY18E.

Sadbhav Engineerings (SEL) Q1FY18 standalone revenue (up 17% YoY) was above consensus/our estimates driven by improved execution of road projects. EBITDA margin increased by 50 bps YoY at 11.3% driven by better execution

ICICI Securities Ltd | Retail Equity Research Sadbhav Engineering's (SEL) topline grew 17.0% YoY to | 944.4 crore (our expectation: | 938.1 crore) led by strong execution The EBITDA margin expanded 50 bps YoY to 11.3%, led by lower construction expenses (78.7% as a percentage of sales in Q1FY18 vs. 82.0% in Q1FY17). It was above our estimate of 10.7% Net profit grew 13.8% YoY to | 55.4 crore (our expectation: | 48.9...

Sadbhav's (SEL) FY17 order inflow was up 42% at Rs 35 bn vs.Rs 25 bn in FY16. Moreover, SEL was declared lowest bidder (L1) in 2 Hybrid Annuity Model (HAM) road projects of NHAI worth ~Rs 15bn in Mar'17 which will get booked in Q1FY18.

SEL reported 4QFY17 RPAT beat of 64%, led by strong revenue growth (20.4% YoY). Revenue is expected to ramp up further, as execution of three (out of seven) HAM projects has begun, two more projects will start contributing from 2QFY18E and the balance two by 3QFY18E. SELs net debt has increased to Rs 16.3bn ( Rs 2.7bn QoQ), as it paid Rs 1.6bn mobilisation advance to NHAI.

Sadbhav Engineering's (SEL) topline grew 20.4% YoY to | 1032.9 crore (our expectation: | 983.8 crore) led by strong execution EBITDA margins remained flat YoY at 10.6% (our estimate: 10.6%) PAT grew 95.4% YoY to | 68.2 crore due to strong topline growth & lower effective tax rate (4.7% in Q4FY17 vs. 15.5% in Q4FY16). PAT was above our estimate of | 60.7 crore due to higher-than-expected other income (| 21.8 crore in Q4FY17 vs. our estimate of | 6.0 crore) Board has recommended a final dividend of | 0.75/ share for FY17...

ICICI Securities Ltd | Retail Equity Research Sadbhav Engineering's (SEL) topline grew 14.8% YoY to | 864.8 crore (our expectation: | 855.9 crore) due to strong execution EBITDA margin expanded 104 bps YoY to 10.8% (our estimate:...

Sadbhav Eng (SEL) reported strong 3QFY17 revenue growth (14.8% YoY), leading to 18.5% APAT beat. Going forward, four HAM projects are expected to contribute Rs 2bn incremental revenue in 4QFY17E, leading to a strong performance. SEL?s net debt has increased to Rs 13.6bn ( Rs 2.3bn QoQ), as it paid a Rs 1.1bn mobilisation advance to NHAI and supported SIPL with Rs 700mn loans.

SEL reported weak APAT (58.3% below estimates). Extended monsoons, Kaveri river protest and mining service tax issues led to execution delays across all verticals. Effectively, SEL lost out on Rs 1bn potential revenue during 2QFY17. Higher interest cost ( 32.8% YoY) on account of increased working capital needs also impacted APAT. NWC cycle deteriorated to 55days as against 34days in FY16-end.

ICICI Securities Ltd | Retail Equity Research Sadbhav Engineering's (SEL) topline de-grew 17.5% YoY to | 615.6 crore below our expectation of | 799.3 crore on account of muted execution in the mining and irrigation verticals Despite muted execution, the EBITDA margin contracted only 20 bps YoY to 10.6% and was above our expectation of 10.8% Net profit de-grew 33.4% YoY to | 18.5 crore (our estimate: | 36.4 crore) despite a lower effective tax rate (0.8% in Q2FY17 vs. 19.7% in...