Punj Lloyd Q1FY10 Result

Punj Llyod (PLL) reported strong performance during Q1FY10 with revenue growth of 12% yoy and net profit growth of 30% yoy, as against our estimate of a decline.

Consolidated revenue growth was above estimates at 12.2% yoy to RS29,728 mn, although lowest in past 8 quarters. We had estimated for a 13% yoy decline in revenues – attributed to order book composition and low opening order book cover at 1.7X FY09 revenues.

Operating margins improved 50 bps yoy to 10.4%, as against our estimate of 110 bps drop, primarily due to lower than expected increase in raw material costs. Consequently operating profits increased 18.3% yoy to Rs3094 mn, above estimates.

Led by strong revenue growth, improvement in operating margins and high other income, adjusted net profits increased 30.3% yoy to Rs1272 mn, above estimates. PLL had reported forex loss of Rs500 mn in Q1FY09 (Included in other income).

PLL’s order book increased 38% yoy to Rs278.9 bn led by Rs100 bn (up 86% yoy) worth orders bagged during the quarter. PLL bagged most of its orders in the infrastructure segment, with infrastructure now contributing 56% (37%) of total order book followed by Process, plants & others at 22% (42%) and Pipelines at 20% (19%).

The auditors marginally increased their qualification with respect to deductions and recoveries amounting in total to Rs696 mn (As on March 2009 – Rs536 mn)

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