Stock Market Flash on Jyoti Structures for 4QFY2011

Revenues slightly higher than our estimates: Jyoti Structures reported 32% yoy growth in top-line to `722cr, which was higher by 2.3% from our expectation of `703cr. For FY2011, the revenues grew 18% yoy to `2,380cr (`2,016cr).

Positive surprise in EBIDTA margins: EBITDA margin for the quarter was at 11.6%, which was higher by 80bp from our estimates of 10.8%. Higher sales volume coupled with lower raw material costs aided margin improvement, resulting into EBIDTA growing by 18% yoy `84cr (`71cr). Notably, the margins were lower compared to 4QFY10 by 138bp mainly due higher sub contracting expense during the quarter. For FY2011, margins came in at 11.5% which was in line with management guidance as well as our estimates.

Reported PAT higher than our estimates: Strong revenue growth, margin expansion and higher other income resulted into the PAT growth 38.4% yoy to `35cr (`25cr). For FY2011, PAT increased by 20.7% to `111cr (`92cr).

Overall, the results were higher than our expectations. At CMP of `82, the stock is trading at 6x and 4.9x its FY2012E and FY2013E earnings estimate. We will revisit our estimates post the conference call. Currently, we maintain our buy recommendation on the stock with a target price of `110.

Exhibit 1: Actual vs estimates

( ` cr)	Actual	Estimates	Var (%)
Revenue	722	703	2.7
EBITDA	84	76	11.1
PAT	35	30	16.2
EPS	4.3	3.7	16.1

Exhibit 2: Quarterly performance

(` cr)	4QFY11	4QFY10	% chg (yoy)	3QFY11	% chg (qoq)	FY11	FY10	% chg (yoy)
Net Sales	722	547	32.0	551	30.9	2,380	2,013	18.2
Other operating income	-	-	-	-	-	0.09	3.07	-
Total income	722	547	31.9	551	30.9	2,380	2,016	18.0
Stock adjustments	6	7		1		(3)	10
Raw Material	386	304	26.7	296	30.5	1,339	1,224	9.4
(% of total income)	53.4	55.6		53.6		56.3	60.7
Employee Cost	20	16	19.8	19	4.5	72	60	19.8
(% of total income)	2.7	3.0		3.4		3.0	3.0
Erection and Sub-Contracting exp.	137	88	48.9	108	37.8	451	304	36.3
(% of total income)	18.9	16.1		19.5		18.9	15.1
Other Expenses	90	60	48.9	65	37.8	247	181	36.3
(% of total income)	12.4	11.0		11.8		10.4	9.0
Total Expenditure	638	476	34.0	488	30.6	2,106	1,779	18.4
EBITDA	84	71	18.0	63	33.6	274	237	15.4
(EBITDA %)	11.6	13.0		11.4		11.5	11.8
Interest	33	25	32.8	21	56.2	95	79	20.6
Depreciation	5	6	(14.1)	5	6.5	20	17	19.4
Other Income	7	1	0	0	0.0	8	2	0.0
PBT	53	41	29.7	37	42.1	167	144	15.9
(% of total income)	7.3	7.4		6.7		7.0	7.2
Total Tax	12	15	(19.3)	12	0.0	56	52	7.6
(% of PBT)	33.6	37.8		33.4		33.7	36.3
PAT (Reported)	35	25	38.4	25	41.6	111	92	20.7
(% of total income)	4.8	4.6		4.5		4.7	4.6
EPS (`)	4.3	3.1	38.2	3.0	41.5	13.5	11.2	20.3