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Arihant Capital Markets Ltd

Published on 6/07/2020 9:11:56 AM

AXISCADES ENGINEERING TECHNOLOGIES LTD. Q4FY20 RESULT UPDATE

AXISCADES Engineering Technologies reported good set of numbers in Q4FY20. Consolidated revenue for the quarter stood at Rs 1,924 mn, registering +14.3% QoQ/+18.4% YoY growth. Reported EBITDA stood at Rs 332 mn against Rs 85 mn in the corresponding quarter of previous year. On a sequential basis EBITDA saw a growth of +33%. EBITDA margin expanded +243 bps QoQ/+1202 bps YoY to 17.3%, against 5.2% in Q4FY19. The company saw expansion in margin after closer alignment to customers. Consolidated PAT for the quarter stood at Rs 164 mn, registering a sequential growth of +98.0% QoQ. The Company delivered significant improvement in Revenue, EBITDA Margins and Net Profits on back of increased and new engagements from customers. With a longer-term perspective and after factoring in good Q4FY20 results, we have revised our FY21E/FY22E estimates. We maintain our Buy rating on AXISCADES with a target price of Rs 73.

 Outlook & Valuation - We expect that AxisCades Engineering will keep on adding several multimillion dollar contracts in the future as well and its engagements in the defense sector revenue yields to boost its margins as well. At CMP of Rs 59, AXISCADES Engineering Technologies Ltd., currently trades at FY20 P/E of 7.4x. Factoring in good Q4FY20 results, we revised our FY21E/FY22E estimates to build in higher margin and profitability in the future. We value the stock on a P/E (x) multiple of 7x its FY22E earnings, which yields a target price of Rs 73 per share. We maintain our Buy rating on AXISCADES with a target price of Rs 73, giving an upside potential of 23%.

Tags: Fundamental,  Result Update

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