Emkay Global Financial Services has maintained 'Hold' on GMR Infrastructure with a price target of Rs 21 as compared to current market price (CMP) Rs 19 in its report dated Nov. 16, 2012. The broking firm gave following investment rationale on the stock:
Revenues at Rs 19.9 billion +12%yoy, airport vertical witnessed +26%yoy at Rs 11 billion, EPC segment witnessed +29% at Rs 3.7 billion. Inter-segmental transaction more than doubled to Rs 3.4bn impacting overall growth. Although PLF for the power projects stood at 27% v/s 59% in Q2FY12, additional contribution from the mining segment led to 20% yoy growth in Power revenues at Rs 6.3 billion. Lower passenger growth in aviation vertical delaying turnaround prospects for Delhi Airport. Although the near term profitability in Aero segment stands impacted owing to slow traffic growth, however truing up the tariffs of Delhi Airport will negate the impact of slow down in the longer term.
Adjusted EBITDA at Rs 4.7 billion, a decline of 11%yoy, Power EBITDA stood at Rs 202 million sharp decline of 78%yoy, EPC EBITDA at Rs 143 million witnessed 18% yoy contraction. Although Airport segment witnessed Rs 3.6 billion EBITDA with a robust 68% yoy growth, the performance of the aviation segment could have been much better off had the momentum in passenger growth continued during the quarter.
Net loss at Rs 1.8 billion v/s Rs 0.6 billion - Poor operating performance at power vertical average - PLF of 27%. Pax growth -3%yoy impacted UDF collection in DIAL at Rs 2.8 billion v/s exp Rs 4 billion. 1,300MW lined up for commissioning over next 6 months which will drive operating performance. Muted passenger growth in DIAL will delay profitability growth beyond FY15E. Kishangarh Ahmedabad project still awaiting environmental clearance. With gas shortfall showing no respite, Rajamundry commissioning delayed to FY16. Maintain HOLD-TP Rs 21.
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