Angel Broking has maintained `Buy` on Sadbhav Engineering with a price target of Rs 150 in its report dated Jan. 31, 2012. The broking house gave the following rationale:
For 3QFY2012, Sadbhav Engineering (SEL) reported a strong performance, marginally ahead of our expectations (highest on the street) and way ahead of street estimates. SEL reported robust 52.0% yoy growth on the top-line front to Rs 7,237 million, in-line with our estimate of Rs 7,143 million (consensus estimate of Rs 6.3 billion). SEL has been able to maintain a sturdy execution pace for captive road BOT projects since the past few quarters, leading to robust revenue growth. On the margin front, the company posted EBITDAM of 10.4%, marginally lower than our estimate of 10.7%. The only surprise came in the interest cost, as it stood at Rs 106 million, registering a decline of 31.3% on a sequential basis and lower than our estimate of Rs 168 million.
On the earnings front, SEL reported 58.1% growth yoy to Rs 417 million, higher than our expectation of Rs 389 million (consensus estimate of Rs 310 million) on account of higher top-line growth and lower interest cost. We maintain our Buy view on the stock with a target price of Rs 150.
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