Buy Sintex Industries - Emkay - Q3FY12 Result Update

Sintex Industries Ltd
Reco: BUY
CMP: Rs 70
Target Price: Rs 93

Cut earnings; maintain buy on valuations

- Sintex’s 3Q12 APAT was lower than est. due to lower monolithic (25% yoy revenue decline and fall in EBITDA margins) and subsidiaries performance (59% drop in PAT)

- Given FCCB repayment next year and working capital requirements increasing, Mgmt in the call sounded cautious on growth and has reserved its comments on FY13E for now

- Working capital has gone up by Rs2.5bn vs. Sep11 (mainly due to monolithic), cash has gone down by Rs1.9bn vs. sep11 and debt remains at the same level. We Adj. FY12 capex to Rs4bn vs. Rs5bn earlier.

- Estimates cut by 23/28% for FY12/13E. Current valuations pricing in negatives - free cash-flow, part FCCB repayment likely through debt, business momentum. Maintain buy with revised TP of Rs93/Share.

Source : Equity Bulls

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