Post on 05-Apr-2018
7/31/2019 SimplexInfra-1QFY2013-210812
1/11
Please refer to important disclosures at the end of this report 1
Quarterly Highlights Standalone
Operating profit 127 103 148 23.6 (14.4)
Source: Company, Angel Research
For 1QFY2013, Simplex Infrastructures (Simplex) numbers came higher-than-
expectations on the revenue front but owing to higher interest cost, the
performance at the earnings level was in line with our estimate.At the end of the
quarter, the companys order book stood at`15,508cr (2.3x FY2013E revenue).
Simplex witnessed an order inflow of`1,888cr for the quarter which was boosted
by captive road build-operate-transfer (BOT) orders of ~`1,230cr.
On the top-line front, Simplex reported a
robust growth of 28.1% yoy to `1,585cr, higher than our estimate of `1,425cr
(consensus`1,472cr). The revenue contribution from the domestic and overseas
business stood at 88% and 12% respectively in 1QFY2013. The EBITDAM dipped
by 30bp yoy to 8.0% for the quarter, marginally lower than our estimate of 8.3%.
The interest cost came at `70.0cr, a y-o-y/q-o-q jump of 35.2%/2.3%, and
higher than our estimate. The interest cost was higher owing to increase in
working capital. The PAT declined by 16.5% yoy to `20.0cr, in line with our
estimate and consensus of`20cr and`19crrespectively.
Simplex has been performing well on the revenue front
since the last four consecutive quarters and has a strong order book (`15,508cr
2.3x FY2013E revenue). However the management has given a guidance of
10-15% on the revenue front for FY2013 owing to the macro challenges faced
by the sector. Further, Simplex is a well-diversified player in terms of sectors,
geographies and client mix and, unlike its peers, has limited exposure to
road BOT assets.
Key financials (Consolidated)
% chg 5.7 24.6 12.0 16.4
% chg (2.0) (32.9) 38.7 26.0
EBITDA Margin (%) 8.7 7.6 8.1 8.4
P/E (x) 8.3 12.3 8.9 7.0
RoAE (%) 12.1 7.3 9.2 10.6
RoACE (%) 12.3 10.6 10.9 11.8
P/BV (x) 0.9 0.9 0.8 0.7
EV/Sales (x) 0.5 0.5 0.5 0.5
EV/EBITDA (x) 6.1 6.7 6.4 5.9
Source: Company, Angel Research
CMP `207
Target Price `265
Investment Period 12 Months
Stock Info
Sector
Net Debt (` cr) 2,300
Bloomberg Code
Shareholding Pattern (%)
Promoters 55.0
MF / Banks / Indian Fls 26.1
FII / NRIs / OCBs 13.8
Indian Public / Others 5.2
Abs. (%) 3m 1yr 3yr
Sensex 10.5 10.8 14.4
Simplex (1.7) (22.8) (48.3)
217,885
5,421
SINF.BO
SINF@IN
1,024
0.6
290/157
4,129
Infrastructure
Avg. Daily Volume
Market Cap (` cr)
Beta
52 Week High / Low
Face Value (`)BSE Sensex
Nifty
Reuters Code
022-39357800 Ext: 6842
nitin.arora@angelbroking.com
Performance Highlights
1QFY2013 Result Update | Infrastructure
August 21, 2012
7/31/2019 SimplexInfra-1QFY2013-210812
2/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 2
Exhibit 1:Quarterly performance (Standalone)
Total Expenditure 1,458 1,135 1,647 28.5 (11.5) 5,439 4,283 7.0
OPM (%) 8.0 8.3 8.3 (30)bp (30)bp 7.9 8.8 (90)bp
Interest 70 51 68 35.2 2.3 230 145 17.9
Depreciation 32 24 37 31.8 (12.6) 114 91 5.7
Non Operating Income 5 8 2 (38.7) 119.2 10 16 31.7
Nonrecurring items - - - - - - 15 -
Tax 10 11 16 (7.7) (38.3) 44 72 4.0
Minority Interest (MI) - - - - - - -
Adj. PAT (%) 1.3 1.9 1.6 - - 1.5 3.0 -
Source: Company, Angel Research
Exhibit 2:1QFY2013 Actual vs. Estimates
Net Sales 1,425 1,585 11.3
EBITDA 118 127 7.4
EBITDAM (%) 8.3 8.0 (30)bp
Interest and Financial Charges 64 70 8.8
PAT 20 20 1.4
Source: Company, Angel Research
Robust top-line growth
On the top-line front, Simplex reported a robust growth of 28.1% yoy to `1,585cr,
higher than our estimate of `1,425cr (consensus `1,472cr). This is the fourth
consecutive quarter when the company has reported 25%+ yoy growth on the
revenue front. The revenue contribution from the domestic and overseas
operations stood at 88% and 12% respectively for the quarter.At the end of the
quarter, the companys order book stood at `15,508cr (2.3x FY2013E revenue).
Simplex witnessed an order inflow of`1,888cr for the quarter.
7/31/2019 SimplexInfra-1QFY2013-210812
3/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 3
Exhibit 3:Robust top-line growth
Source: Company, Angel Research
Exhibit 4:Composition of revenue (1QFY2013, )
Source: Company, Angel Research
Lower EBITDAM and interest burden pull down earnings
The EBITDAM dipped by 30bp yoy to 8.0% for the quarter, marginally lower than
our estimate of 8.3%. The interest cost came at `70.0cr, a y-o-y/q-o-q jump of
35.2%/2.3%, and higher than our estimate. The PAT declined by 16.5% yoy to
`20.0cr, in line with our estimate and consensus of`20cr and`19crrespectively.
Exhibit 5:EBITDAM trend
Source: Company, Angel Research
Exhibit 6:PAT trend
Source: Company, Angel Research
Order book analysis
At the end of the quarter, the companys order book stood at `15,508cr (2.3x
FY2013E revenue). Simplex had order inflow of `1,888cr for the quarter. The
companys order book comprises 91% domestic and 9% overseas orders.
1,1
67
1,3
67
1,2
37
1,3
22
1,5
94
1,7
96
1,5
85
9.4 9.2
5.2
25.7
36.731.3
28.1
0.05.010.015.020.025.030.035.040.0
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13
Sales (` cr, LHS) Growth (yoy %, RHS)
108
137
120
119
127
148
127
9.2
10.09.5
9.0
8.0 8.3 8.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13
EBITDA (`cr, LHS) EBITDAM (%, RHS)
23
37
24
18
18
29
20
2.0
2.7
1.91.4
1.11.6
1.3
0.00.51.01.52.0
2.53.0
0.05.0
10.015.020.025.030.035.040.0
3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13
PAT (` cr, LHS) PATM (%, RHS)
7/31/2019 SimplexInfra-1QFY2013-210812
4/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 4
Exhibit 7:Order inflow for 1QFY13 Segment wise (%)
Source: Company, Angel Research
Exhibit 8:Order backlog Segment wise (%)
Source: Company, Angel Research
Outlook and valuation
Simplex has been performing well on the revenue front since the last four
consecutive quarters and has a strong order book (`15,508cr 2.3x FY2013E
revenue). However the management has given a guidance of 10-15% on the
revenue front for FY2013 owing to the macro challenges faced by the sector.
Further, Simplex is a well-diversified player in terms of sectors, geographies and
client mix and, unlike its peers, has limited exposure to road BOT assets.
Investment argument
Diversified play
Simplex is one of the oldest infrastructure companies in India (over eight decades
of work log). Since inception, the company has been involved in different segments
of the infrastructure sector, from piling (1924) to power (1960), to roads, railways
and bridges (1980), and the real estate business (2007). The company has
executed ~2,400 projects and is currently involved in >150 ongoing projects in
India and abroad. This indicates the company's execution capabilities, apart from
qualifying it to successfully execute complex and numerous projects on time. The
company is also well spread geographically, with a presence in the
Middle-Eastern countries of Qatar, Oman, Dubai and Abu Dhabi and is now
venturing into newer territories such as Bangladesh. In terms of its client profile,
Simplex has a healthy mix of government and private sector projects. This
successful diversification has not only provided the company the experience of
executing different and complex projects but has also qualified it to bid for bigger
ticket-size projects going ahead.
7/31/2019 SimplexInfra-1QFY2013-210812
5/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 5
Exhibit 9:Recommendation summary
ABL 259 304 Buy 1,495 2,029 2,310 24.3 23.7 27.1 31.7 15.7 10.9 9.6 8.2 2.7CCCL 15 - Neutral 2,048 2,262 2,522 11.0 (0.5) 1.5 2.7 - - 9.9 5.6 2.2
HCC 17 - Neutral 3,988 4,239 4,522 6.5 (3.7) (2.3) (1.0) - - - - 3.5
IRB Infra 126 166 Buy 3,131 3,964 4,582 21.0 14.9 15.5 16.9 6.5 8.4 8.1 7.4 -
ITNL 170 232 Buy 5,606 6,840 7,767 17.7 25.6 24.4 28.3 5.3 6.7 7.0 6.0 2.9
IVRCL 44 61 Buy 4,971 5,510 6,722 16.3 0.9 2.5 4.6 125.5 49.4 17.6 9.7 5.6
JP Assoc. 77 91 Buy 12,853 15,259 17,502 16.7 4.8 4.2 5.0 1.9 16.0 18.2 15.4 -
L&T 1,467 1,553 Accu. 53,171 60,474 69,091 14.0 64.3 72.1 76.3 9.0 22.8 20.3 19.2 2.5
Madhucon 34 56 Buy 1,802 2,206 2,502 17.8 4.9 4.6 4.7 (2.6) 7.0 7.4 7.3 3.2
NCC 41 45 Accu. 5,250 5,804 6,513 11.4 1.4 3.0 3.5 58.0 29.1 13.4 11.7 3.5
Patel Engg 79 - Neutral 3,573 3,609 3,836 3.6 14.9 14.0 14.5 (1.1) 5.3 5.6 5.4 2.7
Punj Lloyd 52 - Neutral 10,557 11,892 13,116 11.5 2.8 1.7 3.1 5.7 18.6 30.4 16.7 2.3
Sadbhav 136 182 Buy 2,676 2,506 3,147 8.5 9.3 7.5 10.4 5.7 14.6 18.1 13.1 2.9
Source: Company, Angel Research
Exhibit 10:SOTP breakup
ABL 118 39 - - 186 61 - - - - 304
CCCL 16 100 - - - - - - - - 16HCC (6) (26) 12 53 16 73 - - - - 22
IRB Infra 98 59 - - 64 39 4 3 - - 166
ITNL 19 8 - - 180 78 - - 33 14 232
IVRCL 41 67 - - - - 20 33 - - 61
JP Assoc. 28 31 30 33 - - - - 33 36 91
L&T 1,221 79 - - - - 332 21 - - 1,553
Madhucon 14 25 2 3 28 50 - - 12 21 56
NCC 25 54 2 4 4 8 - - 15 34 45
Patel Engg 44 46 17 18 16 16 - - 19 20 95
Punj Lloyd 69 100 - - - - - - - - 69
Sadbhav 83 46 - - 99 54 - - - - 182
Source: Company, Angel Research
7/31/2019 SimplexInfra-1QFY2013-210812
6/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 6
Company background
Simplex is one of the oldest construction companies in India, based in Kolkata.
Over the years, Simplex has diversified across various segments to encash upon
the untapped construction opportunity, and it has an excellent track record of
achieving the same. The company is present across eight segments buildings
(25% of order book), bridges (5%), industrial (10%), marine (1%), pilling (3%),
power (23%), rail and roads (24%) and urban infrastructure (8%).
7/31/2019 SimplexInfra-1QFY2013-210812
7/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 7
Profit & loss statement (Consolidated)
Other operating income 16 12 16 26 14 14
% chg 67.8 (3.1) 5.7 24.6 12.0 16.4
Total Expenditure 4,309 4,110 4,404 5,553 6,190 7,182
Net Raw Materials 2,149 1,856 1,705 2,306 2,553 2,949
Other Mfg costs 483 504 2,305 2,782 3,116 3,628
Personnel 1,413 1,472 393 464 520 605
Other 263 278 - - - -
% chg 53.2 12.5 (7.5) 8.7 18.6 20.8
(% of Net Sales) 8.6 10.0 8.7 7.6 8.1 8.4
Depreciation& Amortisation 132 157 96 119 130 142
% chg 36.4 9.2 9.1 4.3 21.8 24.6
(% of Net Sales) 5.8 6.5 6.7 5.6 6.1 6.6
Interest & other Charges 151 122 148 231 265 327
Other Inc (incl pft from Ass/JV) 46 26 24 21 23 28
(% of PBT) 27.5 13.0 12.0 16.2 13.3 13.1
% chg 30.8 20.6 (0.1) (36.5) 33.1 26.0
Extraordinary Expense/(Inc.) (7) - - - - -
Tax 49 71 74 45 55 69
(% of PBT) 28.3 35.6 37.1 35.2 32.4 32.4
Less: Minority interest (MI) 0.8 1.9 1.4 (1.2) (1.7) (2.2)
Prior period items - - - - - -
% chg 29.3 9.2 (2.0) (32.9) 38.7 26.0
(% of Net Sales) 2.5 2.8 2.6 1.4 1.7 1.9
% chg 29.3 9.2 (2.0) (32.9) 38.7 26.0
Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with
previous year numbers
7/31/2019 SimplexInfra-1QFY2013-210812
8/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 8
Balance sheet (Consolidated)
Equity Share Capital 10 10 10 10 10 10Preference Capital - - - - - -
Reserves & Surplus 899 968 1,078 1,197 1,302 1,436
Minority Interest
Total Loans 1,220 1,302 1,632 2,094 2,511 2,954
Deferred Tax Liability 58 88 138 195 195 195
Other Long Term Liabilities - 10 10 10
Long Term Provisions 7 8 8 8
Gross Block 1,219 1,277 1,509 1,804 1,979 2,154
Less: Acc. Depreciation 208 289 384 525 656 798
Capital Work-in-Progress 14 19 27 44 49 54
Long Term Loans and Adv 46 33 33 33
Other Non-current Assets 142 141 141 141
Current Assets 2,946 3,125 3,634 4,735 5,435 6,379
Inventories 679 671 730 879 1,146 1,365
Sundry Debtors 1,682 1,806 2,317 1,689 1,896 2,208
Cash 119 110 102 73 70 111
Loans & Advances 338 398 452 596 646 741
Other 127 140 33 1,498 1,678 1,953
Current liabilities 1,784 1,760 2,126 2,767 3,099 3,608
Mis. Exp. not written off - - - - - -
Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with
previous year numbers
7/31/2019 SimplexInfra-1QFY2013-210812
9/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 9
Cash flow statement (Consolidated)
Profit before tax (excluding MI) 173 201 199 128 171 215
Depreciation 79 92 96 119 130 142Change in Working Capital 358 314 152 489 370 394
Less: Other income 46 26 24 21 23 28
Direct taxes paid 30 46 16 45 55 69
(Inc.)/ Dec. in Fixed Assets (408) (118) (241) (312) (179) (180)
(Inc.)/ Dec. in Investments 8 (1) (20) (31) (105) (105)
Other income 46 26 24 21 23 28
Issue of Equity - - - - - -
Inc./(Dec.) in loans 444 107 330 462 417 443
Dividend Paid (Incl. Tax) 12 12 11 12 12 12
Others 100 82 (193) 150 - -
Inc./(Dec.) in Cash (4) (9) (8) (29) (3) 41
Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with
previous year numbers
7/31/2019 SimplexInfra-1QFY2013-210812
10/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 10
Key Ratios
P/E (on FDEPS) 8.8 8.1 8.3 12.3 8.9 7.0P/CEPS 5.3 4.7 4.7 5.1 4.2 3.6
P/BV 1.1 1.1 0.9 0.9 0.8 0.7
Dividend yield (%) 1.0 1.0 1.0 1.0 1.0 1.0
EV/Sales 0.5 0.5 0.5 0.5 0.5 0.5
EV/EBITDA 5.3 4.9 6.1 6.7 6.4 5.9
EV / Total Assets 1.0 0.9 0.9 0.9 0.9 0.8
Order Book to Sales 2.1 2.5 3.1 2.8 2.7 2.5
EPS (Basic) 24.9 25.6 25.1 16.8 23.4 29.4
EPS (fully diluted) 23.5 25.6 25.1 16.8 23.4 29.4
Cash EPS 39.3 44.2 44.5 40.8 49.6 58.0
DPS 2.0 2.0 2.0 2.0 2.0 2.0
Book Value 183 197 219 243 264 291
EBIT margin 5.8 6.5 6.7 5.6 6.1 6.5
Tax retention ratio 0.7 0.6 0.6 0.6 0.7 0.7
Asset turnover (x) 2.7 2.1 1.9 1.9 1.8 1.8
ROIC (Post-tax) 11.2 8.8 8.1 7.0 7.5 8.2
Cost of Debt (Post Tax) 11.0 6.2 6.3 8.0 7.8 8.1
Leverage (x) 1.0 1.2 1.3 1.5 1.8 1.9
Operating ROE 11.4 11.9 10.4 5.5 7.0 8.3
ROACE (Pre-tax) 14.6 13.0 12.3 10.6 10.9 11.8
Angel ROIC (Pre-tax) 15.6 13.7 12.9 10.9 11.1 12.1
ROAE 14.0 13.5 12.1 7.3 9.2 10.6
Asset Turnover (Gross Block) 4.8 3.7 3.5 3.6 3.6 3.8
Inventory / Sales (days) 45 54 53 49 55 58
Receivables (days) 110 139 156 122 97 96
Payables (days) 116 141 86 83 92 91
Wcap cycle (ex-cash) (days) 70 92 101 100 113 115
Net debt to equity 1.2 1.2 1.4 1.7 1.9 2.0
Net debt to EBITDA 2.7 2.6 3.6 4.4 4.5 4.3
Interest Coverage 1.8 2.4 2.2 1.5 1.6 1.6
Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with
previous year numbers
7/31/2019 SimplexInfra-1QFY2013-210812
11/11
Simplex Infra | 1QFY2013 Result Update
August 21, 2012 11
Research Team Tel: 022 - 39357800 E-mail: research@angelbroking.com Website: www.angelbroking.com
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should makesuch investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. WhileAngel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or
other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in
the past.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, pleaserefer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited andits affiliates ma have investment ositions in the stocks recommended in this re ort.
Disclosure of Interest Statement Simplex Infra
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.
Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to 15%) Sell (< -15%)