MOSL: GE T&D INDIA (Neutral)-Faced with execution challenges-Still some time before upcoming orders enter execution stage
GE T&D India: Faced with execution challenges; Still some time before upcoming orders enter execution stage
(GETD IN, Mkt Cap USD1b, CMP INR265, TP INR275, 4% Upside, Neutral)
- Dragged by sub-par execution: Sales grew 10% YoY to INR8.9b in 4QFY19, below our estimate of INR10.8b. Execution during the quarter was hurt by declining HVDC sales, soft order inflow and a weak order book. This, along with operating de-leverage, led to a miss on EBIDTA (+330% YoY to INR770m versus our estimate of INR1.0b). Adj. PAT of INR261m (-15% YoY), too, was below our estimate of INR665m.
- Weak order backlog points toward moderate revenue growth for FY20: Order backlog available for execution remains weak (-10% YoY to INR64b; 1.4x its FY19 revenue) for FY20. Although order inflow is likely to pick up in 2HFY20, it will enter the execution cycle only by end-FY20. Against this backdrop, we have penciled in moderate mid-single-digit revenue growth (+6% YoY) for FY20. Nevertheless, given the likelihood of order finalization and availability of orders for execution post FY20, we anticipate revenue growth to pick up to 10% YoY post FY20.
Alstom T&D India is engaged in the manufacture and distribution of electrical components including switchgear, transformers, reactors and control panels. Co.'s products include combination fuse switch boards, distribution fuse boards, overhead busbars, plug in boxes, fuses, switchgear components, miniature circuit breakers,motors, pumps, fans, meters and vacuum interrupters.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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