QuarterlyUpdate

BGREnergySystemsLtd.
BUY

Recommendation

Rs.475 Results in Line with expectation, New order inflow would

CMP(27/05/2011)
Target

662

Sector

PowerEquipment

StockDetails

BSECode

532930

NSECode

BGR

MarketCap(Rs.cr)

3351

FreeFloat(%)

37.85

52wkHI/Lo

871/402

Avg.volumeBSE(Monthly)

77583

Dividend(FY11)

100%

Shareso/s(Crs)

7.20

RelativePerformance

1Mth

3Mth

1Yr

BGR

18.3%

3%

20%

Sensex

7.7%

2%

10%

bethekeytriggergoingforward.

KeyHighlights.

DuringthequarterBGRenergyreported12%(YoY)degrowth
insales,butwasinlinewithourestimates.
EBIDTAmarginincreasedby90bpsfrom10.6%to11.5%YoYon
accountofdeclineinotherexpenditure&employeecost
CurrentorderbookstandsatRs.7971crswithpowersegment

190

140
90

May11

Apr11

Mar11

Sensex

Feb11

Jan11

Dec10

Nov10

BGR

Oct10

Sep10

Aug10

Jul10

Jun10

May10

40

ShareholdingPatternasof31/03/2011
IndianPromoterHolding
FII,banks&Institutions
CorporateBodies
Public&others
AnandVyas,ResearchAnalyst(02239268173)
anand.vyas@nirmalbang.com

contributing around 92%. Total order inflow for FY11 was

aroundRs.2941crs.OrderInflowforcompanyhasbeenmuted
for past 68 months on account of several issues like coal
linkage, environmental clearance etc. Company has bided for
the order worth of Rs. 20,000 crs (40GW) and expects to get
goodamountofsharebyQ2FY12.
According to management, order from Rajasthan is getting
delayedduetocoallinkage.Managementexpectsthisproblem
tobesolvedbyJune2011andexpecttogetorderbyQ2FY12
Guidance:Managementhasguided15%growthinrevenueand
EBIDTAmargintohoveraround1112%.ItexpectsPATmargin
around6.5%
TheLowerGrowthinnextyearisonaccountofdelayinginfresh
order inflow. Once the new order starts coming in, BGR can
againcomebackonhighgrowthpath.
BGRreportPATofRs.98.3Crsagainst108Crs,declineof9%on
YoYbasisonaccountofhigherdepreciationandInterestcost
CompanyreportedtheEPSofRs.13.6against15.05inQ4FY10

81.13%
We believe that going forward; fresh trigger for the company will be
10.32%
neworderinflow.Asstatedabove,companyhasbidedorderworthof
1.96% Rs20,000crs&weexpectcompanytogetgoodamountofsharefrom
6.58% it.AtCMP,stockistrading10xFY12EearningswithEPSofRs.47.4per
share.WemaintainourBUYratingonthestockwiththetargetpriceof
662

Year
FY2009
FY2010
FY2011

NetSales
1,922.1
3,073.8
4,760.8

FY2012E

5,412.7

Growth%
EBIDTA
26.4% 204.0
59.9% 348.9
54.9% 550.3
13.7% 616.5

EBIDTAM
(%)
PAT
10.6% 111.2
11.3% 201.8
11.6% 324.0
11.4% 341.4

PATM
(%)
5.8%
6.6%
6.8%

EPS(Rs.)
P/E(x)
15.4
30.8
28.0
16.9
45.0
10.6

6.3% 47.4

10.0

P/BV
6.09
4.86
3.61
2.84

QuarterlyUpdate

BGREnergySystemsLtd.

QuarterlyResults
Netsales
OtherOperatingRevenue
TotalRevenue

Q4FY11
1,457.28
4.35
1,461.63

Q4FY10
1,657.08
2.69
1,659.77

TotalExp.
(inc)/DecinstockinTrade
ConsumptionofRawMaterials
TotalCOGS
EmployeeCost
OtherExp.
EBIDTA
EBIDTAMargin(%)
OtherIncome
Depreciation
EBIT
Interestcost
PBT
Tax
PAT
Margin(%)

1,294.25
1.63
1,237.11
1,238.74
35.36
20.15
167.38
11.5%
1.74
7.03
162.09
18.28
143.81
45.44
98.37
6.7%

1,484.56
0.04
1,382.06
1,382.10
47.51
54.95
175.21
10.6%
3.93
3.07
176.07
11.83
164.24
55.91
108.33
6.5%

Equity
EPS

72.00
13.66

72.00
15.05

(Sources:Companydata,NirmalBangResearch)

Orderbacklog(Rs.Crs)
12197
10613

10215

10881

11069

9523

10230
9397

9173
8364

7971

Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Q4FY11

Sources:Companydata,NirmalBangResearch)

YoY%
Q3FY11
12.1% 1,251.00
5.80
11.9% 1,256.80
12.8% 1,109.68
(3.17)
10.5% 1,013.26
10.4% 1,010.09
25.6% 41.47
63.3% 58.12
4.5% 147.12
11.7%
55.7% 1.68
129.0% 3.42
7.9% 145.38
54.6% 16.76
12.4% 128.62
18.7% 41.13
9.2% 87.49
7.0%
72.00
12.15

QoQ%
16.5%
16.3%
16.6%
22.1%
22.6%
14.7%
65.3%
13.8%
3.6%
105.6%
11.5%
9.1%
11.8%
10.5%
12.4%

QuarterlyUpdate

MajorProjectExecutionStatus

Projects
Jalawar(Raj)
Mettur(Tamilnadu)
Krishnapatnam(A.P)
Marwa(Chattisgarh)
Kothgudam(A.P)
Khaperkheda(Maharashttra)
Kakatiya(A.P)
Chandrapur(Maharashtra)

(Sources:Companydata,NirmalBangResearch)

BGREnergySystemsLtd.

Size
2x660MW
1x660MW
2x660MW
2x500MW
1x500MW
1x500MW
1x500MW
2x500MW

Type
EPC
EPC
BOP
BOP
BOP
BOP
BOP
BOP

%Completed
70%
80%
0%
20%
90%
Completed
Completed
40%

Otherkeyhighlights:

TheHitachiJVisonthetrackandcompanyhasacquiredlandfortheconsiderationofRs..150
crs.Landforancillaryactivitiesisyettoacquire.Companyexpectsfinancialclosureforthesame
innext4months.
Management Indicated that macro issues like Coal linkage, environmental clearance, financial
closureetc.,haveaffectedtheorderingactivityinpowersector.

QuarterlyUpdate

BGREnergySystemsLtd.

NOTE

Disclaimer
This Document has been prepared by Nirmal Bang Research (Nirmal Bang Securities PVT LTD).The
information, analysis and estimates contained herein are based on Nirmal Bang Research assessment
andhavebeenobtainedfromsourcesbelievedtobereliable.Thisdocumentismeantfortheuseofthe
intendedrecipientonly.Thisdocument,atbest,representsNirmalBangResearchopinionandismeant
forgeneralinformationonly.NirmalBangResearch,itsdirectors,officersoremployeesshallnotinany
wayberesponsibleforthecontentsstatedherein.NirmalBangResearchexpresslydisclaimsanyandall
liabilitiesthatmayarisefrominformation,errorsoromissionsinthisconnection.Thisdocumentisnotto
beconsideredasanoffertosellorasolicitationtobuyanysecurities.NirmalBangResearch,itsaffiliates
andtheiremployeesmayfromtimetotimeholdpositionsinsecuritiesreferredtoherein.NirmalBang
Research or its affiliates may from time to time solicit from or perform investment banking or other
servicesforanycompanymentionedinthisdocument.