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Company Report | Q4FY11 Result Update


16 May 2011 Buy

Industry Power Q4FY11 Result Highlights

CMP (INR) 164
Target (INR) 234 Diamond Power Infrastructure Ltd (DPIL) reported revenue of INR 3,424
Upside / Downside (%) 42 mn for the quarter, up 16%, YoY. Revenue for FY11 was INR 14,525 mn,
52 week High/Low (INR) 264/129 up 69%, YoY. Revenues were driven primarily by additional capacity
Market Cap (INR MN) 610 coming online in FY11. As a percentage of total revenues, EPC business
3M Avg. Volumes (000’s) 103 stood at 28%, cables 28%, conductors 30%, transformers 14%.
P/E (FY12e) 5.6x

EBITDA for the quarter was INR 467 mn, up 20%, YoY. EBITDA margin
Shareholding Pattern (%)
for the quarter improved by 43 bps, YoY. EBITDA for FY11 increased by
Institutions Promoters 72%, YoY to INR 2,008 mn. EBITDA margin for the year saw a 25 bps
42% 40%
improvement over the previous year to 13.8%. EBITDA was inline with
Unicon estimates.

PAT for the quarter increased by 18%, YoY to INR 263 mn. PAT margin
saw a marginal improvement of 13 bps over the same quarter previous
Institutions year. PAT for the year improved substantially by 85%, over the previous
year to INR 1,146 mn. PAT margin for the year increased by 68 bps to
Stock Performance
Order book position as on Q4FY11 stands at INR 14,000 mn which is
0.84x our FY12 revenue estimates. Order inflow for the quarter was ~INR
2,600 mn.


100 Outlook & Valuation





DPIL signed a MoU with Utkal Galavanizers Ltd in Apr 2011 to acquire a
Diamond Power Sensex
strategic stake in the company. Utkal Galvanizers is closely associated
with the power sector for Extra High Voltage Power Transmission, right
Performance (%) from the concept of design to commissioning of EHV Towers, substations
and other lattice structures. Utkal Galvanizers is an approved vendor and
1 Month 3 Months 1 Year
an EPC contractor of Power Grid Corporation of India Ltd. for various
DPI -3.7 14.5 -7.3
EHV Transmission products. With the strategic stake in Utkal, Diamond
SENSEX -4.4 1.8 9.0
* Source: Bloomberg, Unicon Research Power’s foray in Transmission and Extra High Voltage segment will get a
boost and the company would be able to leverage its presence by serving
(INR Mn) all segments of the T&D Industry. At CMP the stock trades at 5.6x our
Particulars Actual Estimates
FY12 earnings estimate. We revise our target price and lower our FY12
Total Income 3,424 3,545
EPS estimates by 8% in view of higher raw material and interest costs. We
EBIDTA 467 471
maintain Buy with a target price of INR 234.
Reported PAT 263 272
* Source: Bloomberg, Unicon Research

Amish Pansuria | apansuria@unicon.in

Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.

Email: wealthresearch@unicon.in

(INR Mn)
Q4FY11 Q4FY10 Y-o-Y FY11 FY10 Y-o-Y
Net Revenue 3,424 2,953 16% 14,525 8,601 69%
Operating Exp. 2,956 2,562 15% 12,517 7,434 68%
EBITDA 467 390 20% 2,008 1,168 72%
EBITDA (%) 13.7% 13.2% 43 bps 13.8% 13.6% 25 bps
Depreciation 52 34 51% 132.2 68 94%
EBIT 416 356 17% 1,876 1,100 71%
EBIT (%) 12.1% 12.1% 8 bps 12.9% 12.8% 13 bps
Interest 78 72 8% 285 242 18%
Other Income 20 6 213% 46 13 252%
Tax Provision 94 67 40% 491 251 96%
Tax Rate (%) 26.2% 23.0% 323 bps 30.0% 28.8% 118 bps
PAT 263 223 18% 1,146 620 85%
Extraordinary Items 0 0 NA 0 0 NA
Reported PAT 263 223 18% 1,146 620 85%
Reported PAT (%) 7.7% 7.6% 13 bps 7.9% 7.2% 68 bps
EPS 6.8 7.96 -15% 30.5 22.1 38%
Source: Company, Unicon Research
(INR Mn)
Segment Q4FY11 Q4FY10 Y-o-Y FY11 FY10 Y-o-Y
Conductors 1,034 1,192 -13% 4,332 3,530 23%
Power Infrastructure 1,027 1,156 -11% 4,336 3,292 32%
Power Cables 1,222 730 67% 4,656 1,822 156%
Transformer 645 407 59% 2,320 1,359 71%
Total 3,928 3,485 13% 15,647 10,002 56%
Less: Intersegment Sales 504 532 -5% 1,121 1,401 -20%
Net Sales 3,424 2,953 16% 14,525 8,601 69%
Source: Company, Unicon Research

Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.

Email: wealthresearch@unicon.in
Unicon Investment Ranking Methodology

Rating Buy Accumulate Hold Reduce Sell

Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%

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