Buy Indian Hume Pipe Ltd Target Rs.257 - Sushil Finance
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HIGHLIGHTS FROM THE QUARTER/9MFY22:
* The Indian Hume Pipe Company Ltd (IHP) reported total revenue of Rs. 421.5 cr, for Q3FY22 as against Rs. 279.9 cr, in Q3FY21. The Company has reported an EBIDTA of Rs. 38.8 cr and a Net Profit of Rs. 15.2 cr as against Rs. 26.8 Crores and Rs. 4.4 Crores reported respectively in Q3FY21.
* The Indian Hume Pipe Company Ltd (IHP) reported a total income of Rs. 1128.7 cr, for the 9MFY22 as against Rs. 782.7 cr, in the corresponding period of the previous year. The Company has reported an EBIDTA of Rs. 103.9 cr as against Rs. 68.1 cr reported in the corresponding period of the previous year. Net profit for 9MFY22 was Rs. 38 cr (PAT%: 3.4%) as against net profit of Rs. 3.5 cr (PAT%: 0.5%) reported in 9MFY21.
* The estimated balance value of the work as at 31st January, 2020 is Rs. 4,149.62 cr as against Rs. 4,691.57 cr as at 31st January, 2021.
OUTLOOK AND VALUATION
As a result of the strong order book as on July 2021 and looking at the performance of the company in Q3/9M FY22, we estimate the company’s FY24E revenue will grow to Rs. 1,727.1 cr with an EBITDA, PAT and EPS of Rs. 170.5 cr, Rs. 68.0 cr and Rs. 14.0 respectively. Hence, by assigning an EV/EBITDA multiple of ~10.7X we have arrived at a target price of Rs. 257 (~+14%) within an investment horizon of 12-18 months which makes the recommendation a “BUY”.
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