Angel Broking retains 'buy' on Jyoti Structures

Angel Broking has maintained its ‘Buy’ rating on Jyoti Structures with a target price of Rs 49.For 3QFY2013, Jyoti Structures (Jyoti)’s top-line performance was inline with our expectations, posting a subdued 5.5% yoy growth to Rs 620 crore due to slow execution and revenue deferrals. However, the Management is confident of strong execution in 4QFY2013 as the company has received clearances for its upcoming projects.

The EBITDA margin came in flat yoy at 10.1%. Jyoti’s interest coverage multiple remains under stress, declining from 2.0x in 4QFY2012 to 1.6x presently. The increase in receivables has led to higher working capital borrowing, elevating the interest cost. Consequently, the PAT declined by 3.0% yoy to Rs 13 crore. The company reported weak order inflow of Rs 433 crore in 3QFY2013. However, the management believes order inflow will improve going forward as the company expects few orders from PGCIL and overseas markets to be finalized soon.