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Sunil Hitech Engineers Financial Information |
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Key financials |
FY2008 |
FY2009 |
FY2010E |
FY2011E |
FY2012E |
|
Net sales (Rs cr) |
317.6 |
611.8 |
761.5 |
991.5 |
1256.2 |
|
Net profit (Rs cr) |
23.2 |
10.3 |
36.7 |
38.9 |
51.7 |
|
Adjusted EPS (Rs) |
18.9 |
19.8 |
26.6 |
31.7 |
42.1 |
|
% yoy growth |
– |
4.7 |
34.7 |
18.9 |
32.8 |
|
PER (x) |
11.2 |
10.7 |
7.9 |
6.7 |
5.0 |
|
P/B (x) |
1.6 |
1.5 |
1.3 |
1.1 |
1.0 |
|
EV/EBIDTA (x) |
5.6 |
5.3 |
3.9 |
3.5 |
3.1 |
|
RoCE (%) |
21.0 |
6.1 |
19.6 |
18.2 |
21.0 |
|
RoNW (%) |
23.5 |
17.9 |
18.6 |
19.7 |
22.0 |
We’ve had our eye on Sunil Hitech Engineers for a long time. It also featured in our top 10 Midcap value picks.
One reason why Sunil Hitech Engineers is being quoted at a discount to its peers is because it is perceived as being a mere labour supplier and contractor. However, Sunil Hitech Engineers is transforming itself to become a full-fledged Balance of Plant (BoP) contractor for thermal power plants. It has the capacity to execute large BoP contracts for up to 500MW power plants and engineering, procurement and construction (EPC) contracts for up to 100MW (up from 25-50MW earlier) units.
Sunil Hitech Engineers is now among a handful of Indian players that are pre-qualified to undertake critical BoP packages for up to 660MW capacity.
Sunil Hitech Engineers current order book is about Rs. 2,062 crore, which is about 3.4 times FY2009 net revenues assuring strong revenue growth visibility. The bulk of the pending order book is from the power sector and 70% is contributed by the public sector. In the 9 Months to FY 2010, Sunil Hitech Engineers had order inflows of Rs. 1,435 crore which included the Rs. 488-crore worth BoP order for Mahajenco’s 250MW power project and the Rs. 193-crore Koradi Thermal Power Station order from Larsen and Toubro.
Sunil Hitech Engineers has grown at an exponential rate of 103% over FY2007-09. Given this track record, the robust order book and the available opportunitys it is not unreasonable to expect Sunil Hitech Engineers to double its net revenues and earnings over FY2009-12.
Thanks to the perception of Sunil Hitech Engineers being only a labour contractor, Sunil Hitech Engineers‘ stock trades at a PE of about 8 – 9 times its FY 10 earnings. This is at a discount to its peers and its current valuation leaves significant scope for re-rating.
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