Sanghvi Movers
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs1,050
Current market price: Rs818
Results in line with estimates
Result highlights
- The Q4FY2007 results of Sanghvi Movers Ltd (SML) are in line with our expectations. The company's revenues increased by 23.6% to Rs52.1 crore and the net profit grew by 70% to Rs15.1 crore year on year (yoy).
- We had mentioned in our previous update that the Q3FY2007 performance was not up to the mark because of the high base effect. The company had got an additional order of around Rs20 crore from Reliance Industries in Q3FY2006 due to a shutdown in the latter's refinery; this boosted the base of the previous year. The fourth quarter's splendid performance after the subdued Q3FY2007 numbers reaffirms our faith in the company. On a sequential basis, the revenues grew by 34% and the net profit grew by 80%.
- The operating profit margin (OPM) for the quarter improved by 680 basis points to 75.5% against 68.6% in Q3FY2006 yoy and by 330 basis points on a sequential basis. The operating profit for the quarter grew by 36% to Rs39.3 crore.
- The interest expense for the quarter increased by 43% to Rs6.3 crore, while the depreciation cost for the quarter declined by 3.8% to Rs10 crore.
- For the full year, the net revenue grew 19.8% to Rs170 crore and the net profit rose by 99.8% to Rs64.3 crore. Adjusting for the extraordinary item to the tune of Rs17.1 crore (on account of a change in the deprecation policy) in the current financial year, the net profit grew by 46.6%.
- The company has announced a stock split in the ratio of five equity shares of Rs2 each for every existing equity share of Rs10.
- The company did a capital expenditure (capex) of Rs70 crore during this quarter and of Rs189 crore in the full year. It now plans to add more cranes worth Rs150 crore in FY2008.
- The company added 21 new cranes and a total of 42 cranes in this year. What's more, it has already placed order for 15 new cranes to be added in FY2008.
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