ISGEC Heavy Engineering Q1 Review - Cost Pressure Impacts Margins; Muted Execution: ICICI Securities
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ICICI Securities Report
ISGEC Heavy Engineering Ltd. has reported lower-than-expected revenue at Rs 8.1 billion versus our estimate of Rs 11.5 billion in Q1 FY22.
Ebitda margin dropped 340 basis points YoY to 4.4%, impacted by higher cost overheads.
ISGEC' management is confident of recovery in margins and normalisation of the same.
Order intake has been strong with Rs 2.4 billion of consolidated and Rs 2.1 billion of standalone order intake with current consolidated order book of Rs 79.2 billion.
Factoring in near term margin stress, we marginally cut standalone earnings by 5% (each) for FY21E and FY22E.
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