Recommendation: Buy
Current price: Rs 69 (at the time of publishing this tip)
Target price: Rs 106
Key points:
- Bartronics reported Q3FY09 topline at Rs 137.2 crore with a growth of 95.5% YoY and de-growth of 14.6% QoQ. The EBITDA margin at 26.6% improved by 724 bps QoQ and 665 bps YoY on the back of lower raw material costs incurred by the company. PAT for the quarter stood at Rs 24.6 crore, up 125.1% YoY and 22.1% QoQ.
- The company had no billing in the Singapore market in this quarter. However, it managed to bag two big orders from the Singapore government for RFID tagging in warehouses in the central prison and also in newly constructed buildings. These are expected to generate revenues from Q4FY09 onwards.
- The company had forex gains of Rs 11.69 crore, which helped it to post decent bottomline of Rs 24.6 crore. Excluding this extraordinary item the net margin would be at 9.5%, which is much lower than 12.6% in the last quarter.
- Important stock data: Market Cap. Rs 249.5 Cr; Debt (FY08) Rs 313.0 Cr; Cash (FY08) Rs 16.5 Cr; EV Rs 300.7 Cr; 52 week H/L Rs 147/40; Equity capital Rs 28.98 Cr; Face value Rs 10; MF Holding 6.2%; FII Holding 6.6%
- At current price of Rs 69, Bartronics is trading at 3.0x its FY09E EPS of Rs 23.2 and 1.6x its FY10E EPS of Rs 42.3.
- I maintain Buy recommendation on this stock with a target price of Rs 106 over next 9-10 months.
