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Result Update
CMP Rs 39 Astra Microwave Products Ltd (AMPL) reported below expected Q4FY11
Target Price Rs 50 results at EBITDA and PAT level. During the quarter the net sales declined
by 6.5% to Rs 454 mn followed by 29.5% decline in EBITDA & 59.4% decline
in PAT. EBITDA and PAT declined on higher employee expenses, material
cost and interest expenses. The management has guided for Rs 2 bn of
Key Data revenue with 18‐20% of PAT margin in FY12E. The current order book of the
Face Value (Rs) 2.00 company is at Rs 2.97 bn which is expected to strengthen further in near
Market Cap (Rs Mn) 3191
terms on new order inflows. The management expects order inflows of Rs 1
Total O/s Shares (Mn) 81.8
bn for Askash missiles and Central Acquisition Radars in June 2011 quarter.
Free Float (%) 81.1
52 week H/L (Rs) 52/35 Key Highlights
Avg Monthly Volume (BSE) 56284
Q4 Revenue inline, Guides for decent FY12 results: Net sales during
Avg Monthly Volume (NSE) 97373
Q4FY11 declined by 6.5% yoy to Rs 454 mn which was inline with our
BSE Code 532493
NSE Code ASTRAMICRO expectation. This quarter revenue was on a higher base of last year. For
Bloomberg code ASTM IN the full year AMPL reported Rs 1.61 bn of revenue with yoy growth of
Beta 1.1 50.9%. For FY12 the management has guided for Rs 2‐2.1 bn of revenue
Date of Incorporation Sept 1991 with 18‐20% PAT margins. The management expects Q4FY12 to be better
Last Dividend Declared (FY11) 25%
than first three quarters. Further the management guided to maintain
Six month returns -6.72%
20% growth in FY13.
Indices BSE 500
FCCB's Outstanding NA EBITDA and PAT margins were below expected: AMPL reported 29.5%
Warrants outstanding NA decline in EBITDA led by 1) little higher material content in execution (to
the tune of Rs 30‐40 mn) in the quarter, 2) increase in employee expenses
and 3) other expenses. As a result the EBITDA margin for the quarter
One Year Price / Volume Chart
declined by 771 bps to 23.6%. The interest cost for the quarter grew by
60 3500000
50 3000000
131.1% yoy to Rs 19.6 mn led by higher short term borrowings which was
2500000
40
2000000
further repaid towards the end of the year. This results into PAT
30
20
1500000
1000000
declining by 57.3% yoy to Rs 37.5 mn.
10
Decent order book of Rs 2.97 bn: The Company has a current order
500000
0 0
Jan-10 Mar-10 Apr-10 Jun-10 Jul-10 Sep-10 Oct-10 Nov-10 Jan-11
YoY YoY
Particulars Q4FY11 Q4FY10 FY11 FY10
Growth% Growth%
Net Sales 454.1 485.9 -6.5 1611.4 1067.8 50.9
Expenditure 346.8 333.6 4.0 1193.1 825.8 44.5
Purchases of Raw Material 187.9 148.2 26.8 780.7 523.9 49.0
Stock Adjustments 21.0 69.8 -69.9 -31.1 -49.6 -37.3
Employee Cost 71.5 55.6 28.7 242.4 180.6 34.2
Selling & Admin. Expenses 14.9 18.6 -19.9 50.7 38.4 31.8
Other Expenditure 51.5 41.5 24.1 150.5 132.6 13.5
EBITDA 107.3 152.3 -29.5 418.3 241.9 72.9
EBITDAM% 23.6 31.3 -771.1 bps 26.0 22.7 330.0 bps
Other Income 2.9 5.0 -41.6 19.4 16.7 16.2
PBIDT 110.2 157.3 -29.9 437.7 258.6 69.2
Depreciation 32.6 31.6 3.2 124.2 112.0 10.9
Interest 19.6 8.5 131.3 69.2 36.4 90.0
PBT 58.0 117.2 -50.5 244.3 110.2 121.6
Tax 20.9 25.7 -18.7 57.8 28.6 101.8
PAT 37.1 91.5 -59.4 186.5 81.6 128.6
-1065.3
PATM% 8.2 18.8 11.6 7.6 393.3 bps
bps
Extraordinary
-0.4 -3.4 299.6 0.5 -10.2 -
Items/Exceptional items
PAT (after Extra-
37.5 88.0 -57.3 186.1 91.8 102.6
ordinary/Exceptional items)
Equity Capital 163.7 108.3 51.1 163.7 108.3 51.1
EPS Rs 0.5 1.1 -58.3 2.3 0.9 158.0
Source: Company, KJMC Research
Based on decent order book of Rs 2.97 bn executable in the next two years
and expectation on new order inflows, we expect 14.8% CAGR in net
revenue and 26.9% CAGR in PAT in FY11‐13E. We have marginally revised
our estimates for FY12E and introduced estimates for FY13E.
On the basis of FY12E and FY13E EPS of Rs 3.1 and Rs 3.7, the stock is
trading at a P/E of 12.5x and 10.7x respectively. We maintain BUY on the
stock with target price of Rs 50. At our target price the stock trades at FY12E
P/E of 16x.
Particulars FY10 FY11 FY12E FY13E Particulars FY10 FY11P FY12E FY13E
Loans -71.5 -116.4 0.0 0.0 Debtor Days 246.3 185.8 200.8 215.8
Inventory Days 177.4 151.5 148.7 140.1
Dividend -31.9 -48.2 -48.2 -48.2 Current Liability Days 267.1 226.2 214.9 195.6
Net Working Cap Days 270.6 197.2 199.1 226.0
Interest & Others -36.4 -92.2 -69.2 -69.2 Gearing Ratio (X)
Net Debt/Equity 0.2 0.1 0.1 0.0
Net Change in Cash -94.1 -52.1 77.9 38.0
Total Debt/Equity 0.4 0.2 0.2 0.2
Source: Company, KJMC Research
Recommendation Parameters
Expected returns in absolute terms over a one‐year period
Buy ‐ appreciate more than 20% over a 12‐ month period
Accumulate ‐ appreciate 10% to 20% over a 12‐ month period
Hold / Neutral ‐ appreciate up to 10% over a 12‐ month period
Reduce ‐ depreciate up to 10% over a 12‐ month period
Sell ‐ depreciate more than 10% over a 12‐ month period
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Astra Microwave Products Ltd 4