Reduce Punj Lloyd - Kotak

Strong execution; though low margins and high debt concern

Strong consolidated revenue of Rs27 bn in 3QFY12 (up 27% yoy) was offset by a sharp dip in EBITDA margin (almost nil) partly on one-offs.

High other income (Rs3.2 bn) boosted PAT to Rs747 mn. Debt at the end of Dec-11 was high at Rs53 bn, a significant rise from Rs45.4 bn at the end of Mar-11. Issues related to (1) significant ONGC claims and (2) Libya assets (though lower quantum) were outstanding.

Retain REDUCE.

Source : Equity Bulls

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