BHFC reported Q4FY22 Ebitda of Rs 4.3 bn, 3% under our estimates as a result of RM headwinds. We anticipate robust development for the corporate led by (i) restoration within the home CV section, (ii) robust order wins together with the defence section and (iii) market share positive aspects within the PV section. However, we anticipate margin pressures to persist. Given >50% of the revenues are derived from cyclical segments, we await a greater entry level on this title. Upgrade to Reduce given latest value correction.
Standalone Ebitda 3% under our estimates: Q4FY22 standalone Ebitda of Rs 4.3 bn (together with foreign exchange positive aspects) was 3% under our estimates as a result of RM pressures. Standalone revenues elevated by 5% q-o-q led by (i) 1% q-o-q decline in home revenues and (ii) 9% q-o-q improve in export revenues. Standalone revenues have been 2% above our estimates largely as a result of marginally higher efficiency of export and home companies. Tonnage volumes elevated by 8% q-o-q whereas common realisations have been down by 3% q-o-q.
US export revenues elevated by 9% q-o-q as a result of restoration in US Class 8 truck manufacturing numbers amid provide challenges. Domestic revenues declined 1% q-o-q primarily as a result of sharp decline within the home non-auto enterprise, partly offset by robust development within the M&HCV section. Standalone Ebitda margin stood at 25.8% (+30 bps q-o-q), 110 bps under our estimates as a result of RM inflation. Adjusted PAT got here in at Rs 2.6 bn, 3% under our estimates. Finance value elevated sharply due to INR depreciation.
Strong order wins throughout segments to drive development; nevertheless, margins to stay beneath strain: We anticipate robust income development over FY2023-24e led by (i) robust order wins throughout automotive and industrial purposes (Rs 10 bn value of recent order wins), (ii) restoration within the home CV section, (iii) market share positive aspects within the home PV section led by new product launches and (iv) anticipated order win for artillery weapons within the defence section. However, we consider margin pressures will stay given persistent inflationary strain in addition to elevated freight and power prices.
Cut our FY2023-24e consolidated EPS estimates by 1-11%: We have lower our FY2023-24e consolidated EPS estimates by 1-11% on decrease Ebitda margin assumptions. Upgrade to Reduce (from SELL) because the inventory value has corrected by 10% over the previous one month. Fair Value stays unchanged at Rs 660 based mostly on 20X June 2024e standalone EPS and 12X June 2024E subsidiaries EPS.
Source: www.financialexpress.com”