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News: Revenue increased by 7.4% YoY (-15.9% QoQ) to Rs 1827.7 crore. EBITDA margin improved by 275 bps YoY (+176 bps QoQ) to 9.7%. Subsequently, EBITDA increased by 50% YoY (+2.9% QoQ) to Rs 176.6 crore. Other income was higher by 53.7% YoY to Rs 251.5 crore, which further led PAT to grow by 55.6% YoY to Rs 332.9 crore. H1FY24 revenue growth remains flattish at 1.7% YoY to Rs 4000.5 crore as revenue de-grew in Q1FY24. EBITDA margin for H1FY24 stands at 8.7% (+130 bps YoY), leading to EBITDA growth at 19.5% YoY.
Views: Execution is expected to pick-up significantly in 2HFY24 in its key larger contracts like P-15B destroyers and P-17A frigates as the management has been guiding for 10-12% growth in revenues for FY24E. Margins are also expected to be better in 2HFY24 with better execution. Order backlog is estimated to be at ~Rs 37500 crore (4.8x TTM revenues) and provides healthy revenue growth visibility. Orders pipeline also looks healthy considering the upcoming contracts in submarines, destroyers, frigates. Company has also been exploring opportunities in exports & repair/refit in defence or commercial shipbuilding where new contracts would emerge in future.
Impact: Neutral