Key highlights of the 3QFY24 Result
Strong performance; In-line with our expectations
The company during the quarter has reported 84.2%/73.7%/46.9% YoY growth in Sales/EBIDTA/PAT to Rs 330.1 cr/Rs 103.6 cr/ Rs 50.6 cr respectively. The EBITDA margin during the quarter dropped 190 bps YoY to 31.4%. The company has crossed full year FY23 Sales and Net profit as 9MFY24 Sales/EBITDA/PAT were up by 59.2%/58.2%/52.4% YoY to Rs 734.5 cr/ Rs 244.0 cr/ Rs 118.6 cr respectively. 9MFY24 EBITDA margin remained steady at 33.2% v/s 33.4% same period previous year. The overall performance is in-line with our expectations.
The order book provides healthy revenue visibility for next 2-3 years:
The current order book as of Feb’24 is 750 MW including 300 MW under IPP and 450 MW under CPP. The management is confident of growing the earnings by 45-50% over next 2-3 years. The current order book in rupee terms is estimated to be at Rs 2,600-3,000 cr which is ~3x of its 9MFY24 annualised sales thus offering healthy revenue visibility in medium terms.
Post fund raising, D/E is now below 1x:
The company during the quarter has raised Rs 422 cr through mix of both preferential issue and QIP. The fund inflow has helped to improve the overall balance sheet with current D/E ratio of 0.8x. The company’s overall debt though is unlikely to reduce given the capex plan under progress. We expect D/E ratio to reach 1.4x by 2026 as more IPP projects get executed.
Valuation still attractive; Maintain buy rating- Target Rs 1,868.5/-
At the current price, the company is trading at 43.9x/30.4x/20.0x of its FY24E/FY25E/FY26E earnings respectively. We maintain our buy rating on the stock with an upgraded price target of Rs 1,868.5/- thus providing an upside potential of 26.7%.
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