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TECHNO ELECTRIC & ENGINEERING: RESULTS REVIEW 3QFY17
EPC Business Revenue and EBIT Margin Trajectory Wind Energy Revenue and EBIT Margin Trajectory
EPC Revenue EBIT Margin - RHS Wind Revenue EBIT Margin - RHS
Rs mn % Rs mn %
3,500 18.0 800 100.0
Grid expansion/stabilisation 16.0 700 50.0
3,000
projects would continue to 14.0 600 -
2,500
drive investments in Power 12.0 500 (50.0)
2,000
T&D space 10.0
400 (100.0)
1,500 8.0
300 (150.0)
6.0
1,000 200 (200.0)
4.0
500 2.0 100 (250.0)
0 0.0 - (300.0)
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
Source : Company, HDFC sec Inst Research Source : Company, HDFC sec Inst Research
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TECHNO ELECTRIC & ENGINEERING: RESULTS REVIEW 3QFY17
Change In Estimates
Previous estimates Revised estimates % change
(Rs mn)
FY17E FY18E FY19E FY17E FY18E FY19E FY17E FY18E FY19E
Revenues (Rs mn) 14,222 17,048 19,574 13,901 16,303 18,730 -2.3% -4.4% -4.3%
EBITDA (Rs mn) 2,952 3,300 3,614 3,233 3,433 3,770 9.5% 4.0% 4.3%
EBITDA margin (%) 21% 19% 18% 23% 21% 20%
APAT (Rs mn) 1,820 2,200 2,505 2,078 2,408 2,727 14.2% 9.5% 8.9%
Net margin (%) 13% 13% 13% 15% 15% 15%
Source: Company, HDFC sec Inst Research
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TECHNO ELECTRIC & ENGINEERING: RESULTS REVIEW 3QFY17
SOTP Valuation
Business head Parameter Value (Rs mn) Value (Rs/sh)
Standalone business 35,304 321
T&D EPC business 20x Dec-18E P/E 34,811 309
Wind projects capacity FCFF @ 11% WACC 493 4
C&CE 1x 834 7
Tranmission projects 897 8
Jhajjar FCFE @ 14% CoE 733 7
Patran FCFE @ 14% CoE 164 1
Simran Wind FCFF @ 11% WACC 6,641 59
Target price 388
Source: Company, HDFC sec Inst Research
Peer Valuation
MCap CMP TP EPS (Rs/sh) P/E (x) EV/EBITDA (x) ROE (%)
Company Rating
(Rs bn) (Rs) (Rs) FY17E FY18E FY19E FY17E FY18E FY19E FY17E FY18E FY19E FY17E FY18E FY19E
Larsen & Toubro ^ 1,397 1500 BUY 1,625 64.8 69.2 69.8 18.0 16.8 16.7 17.2 15.7 13.9 13.1 12.8 11.9
Cummins India * 242 874 BUY 1005 27.3 30.6 34.4 32.0 28.6 25.4 29.0 25.5 22.4 22.8 23.3 23.6
Voltas 112 340 BUY 351 12.4 14.5 16.6 27.3 23.4 20.5 20.0 16.5 13.8 16.2 16.8 17.1
Suzlon 108 18 BUY 24 0.9 1.2 1.5 20.7 15.1 12.0 10.2 9.1 8.3 NA NA NA
Engineers India * 102 152 BUY 178 5.9 6.2 8.0 25.9 24.4 19.0 21.1 18.7 13.1 14.4 14.5 18.0
Thermax 102 858 SELL 770 26.3 27.8 31.8 32.6 30.9 27.0 22.9 20.1 16.9 12.8 12.4 13.0
Carborundum Universal 49 260 BUY 340 8.9 11.5 13.6 29.1 22.5 19.1 13.9 12.0 10.3 13.4 15.4 15.9
Kalpataru Power * ^ 45 290 BUY 363 17.2 18.5 21.3 13.1 12.2 10.6 9.3 8.5 7.5 11.1 10.8 11.2
KEC International 44 169 BUY 179 10.2 11.1 12.7 16.6 15.3 13.3 8.7 8.1 7.3 16.1 15.2 15.3
Techno Electric ^ 43 374 NEU 388 18.2 21.1 23.9 16.9 14.5 12.8 12.9 11.8 10.3 19.5 19.7 19.3
Triveni Turbine 42 127 BUY 148 4.0 4.5 5.1 32.1 28.4 25.0 22.7 19.7 16.9 39.0 34.5 31.1
Crompton Greaves ^ 42 67 BUY 82 -1.2 1.6 1.6 NA 35.2 34.1 12.6 11.1 10.2 -1.7 2.2 2.3
Inox Wind 40 182 BUY 298 21.4 24.9 25.8 8.5 7.3 7.0 5.6 4.7 4.4 22.8 22.0 19.8
Sanghvi Movers * 10 238 BUY 325 21.8 25.7 27.6 10.9 9.3 8.6 4.5 4.2 3.6 12.0 12.7 12.2
*Note Represents SA numbers ^ P/E adjusted for value of Subs /JV's / non-core businesses
Source: Company, HDFC sec Inst Research
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TECHNO ELECTRIC & ENGINEERING: RESULTS REVIEW 3QFY17
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TECHNO ELECTRIC & ENGINEERING: RESULTS REVIEW 3QFY17
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TECHNO ELECTRIC & ENGINEERING: RESULTS REVIEW 3QFY17
RECOMMENDATION HISTORY
Techno Electric TP Date CMP Reco Target
400
13-May-16 275 BUY 303
350 31-May-16 274 BUY 303
300
9-Aug-16 339 NEU 339
21-Nov-16 295 BUY 371
250
13-Feb-17 374 NEU 388
200
150
Rating Definitions
BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
Aug-16
Apr-16
Jan-17
Feb-16
Jul-16
Sep-16
Feb-17
Nov-16
Jun-16
May-16
Dec-16
Mar-16
Oct-16
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period
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TECHNO ELECTRIC & ENGINEERING: RESULTS REVIEW 3QFY17
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