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ICICI Securities Report
ISGEC Heavy Engineering Ltd. reported better than expected execution, which we believe was partly due to the booking of certain delayed products that were under inventory during Q4 FY20.
Product segment execution was better than expectations, with a decline of 5% YoY to Rs 2.3 billion. Project segment margins improved 130 basis points YoY to 4.6% limiting standalone earnings decline to 11% YoY at Rs 291 million.
Sugar segment revenues showed strong 87% YoY growth with 360 basis points YoY higher margins leading to 50% YoY growth in consolidated profit after tax.
Despite headwinds, ISGEC was able to book approximately Rs 8 billion worth of orders in Q1 FY21, resulting in standalone orderbook of Rs 62 billion (1.3 times trailing twelve months sales) providing growth visibility.
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