GVK Power (GVKPOW) - ICICI Direct

Result Update 

Rating matrix 

Rating : Buy 

Target : | 18 

Target Period : 18-24 months 

Potential Upside : 51% 

Key Financials 

| Crore FY11 FY12 FY13E FY14E 

Net Sales 1,915 2,491.8 3,769.0 5,650.2 

EBITDA 514.0 684.0 1,437.8 2,342.8 

Net Profit* 154.9 61.5 76.2 151.9 

EPS (|)* 1.0 0.4 0.5 1.0 

Valuation summary 

FY11 FY12 FY13E FY14E 

P/E 12.1 30.6 24.7 12.4 

Target P/E 18.3 46.0 37.1 18.6 

EV / EBITDA 13.8 20.5 11.5 7.0 

P/BV 0.6 0.5 0.5 0.5 

RoNW 4.6 1.8 2.2 4.1 

RoCE 3.3 2.1 4.3 7.1 

Stock data 

Market Capitalisation | 1879 crore 

Debt (FY 12) | 13,884 crore 

Cash (FY12) | 1726 crore 

EV | 14037 crore 

52 week H/L (|) 24/10 

Equity capital | 157.9 crore 

Face value | 1 

DII Holding (%) 5.1 

FII Holding (%) 18.0 

Price movement 

6,200 

5,500 

4,800 

4,100 

3,400 

2,700 

2,000 

May-11 

Analyst’s name 

Aug-11 

Nov-11 

Feb-12 

Price (R.H.S) Nifty (L.H.S) 

Deepak Purswani, CFA 

deepak.purswani@icicisecurities.com 

Bhupendra Tiwary 

bhupendra.tiwary@icicisecurities.com 

ICICI Securities Ltd | Retail Equity Research 

30 

25 

20 

15 

10 

5 

0 

May-12 

WHAT’S CHANGED… 

May 10, 2012 

GVK Power (GVKPOW) 

| 12 

PRICE TARGET........................................................................... Changed from | 28 to | 18 

EPS (FY13E)............................................................................. Changed from | 0.7 to | 0.5 

EPS (FY14E)...........................................................................................Introducing at | 1.0 

RATING...............................................................................................................Unchanged 

Gas availability hurts power, MIAL show muted… 

GVK Power (GVK) continued to report losses on account of lower PLF 

across power projects due to restricted gas availability and additional 

interest cost pain on account of debt taken for acquisition of stake in 

MIAL and BIAL. While we highlight that near term pain (both operating 

and financially) is likely to remain for GVK for some more time, it is 

looking for PE deal at the airport and road division, which is likely to 

partially allay investors concern over funding gap across the business 

verticals. Nonetheless, we maintain our BUY recommendation purely on 

attractive valuation (currently trading at 0.5x P/BV) and on the hopes of a 

better financial position with anticipated PE deals. 

Higher interest cost continues to eat bottomline… 

GVK’s Q4FY12 performance was dismal mainly on account of lower PLF 

across power plants on account of restricted gas supply and muted 

performance of MIAL. The topline at | 657.6 crore was lower than our 

estimates mainly on account of power division and MIAL revenues. The 

company reported a loss of | 20.9 crore vs. our expectation of loss of 

| 9.2 crore due to lower revenues and margins and higher interest on 

account of debt taken for acquisition of stake in MIAL and BIAL. 

Looking for PE deal in airport and road division… 

GVK is looking for private equity deal in the airport segment to raise 

~| 3000 crore to repay debts raised for acquisition of stake. Additionally, 

to funds its equity commitment towards road projects, the company is 

exploring option of private equity deal in the transportation division also. 

We believe these deals would hold the key for GVK’s performance as it 

would help to reduce interest cost on borrowing for acquisition of a stake 

in MIAL and BIAL as well as to meet the funding requirement for the road 

segment. 

Valuation 

We expect GVK to report a muted performance for some more time given 

unavailability of gas supply at its power plants and additional interest 

burden to fund additional stake in MIAL and BIAL. In our view, the PE deal 

in airport & road division holds the key for the stock price performance, 

going ahead as this would partially allay investors concerns over funding 

gap across airport & transportation verticals. We have assigned a BUY 

rating purely on attractive valuation (currently trading at 0.5x P/BV) and 

on hopes of better financial position with anticipated PE deals. 

Exhibit 1: Financial Performance (MIAL consolidated) 

(| Crore) Q4FY12 Q4FY12E Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %) 

Total Operating Income 657.6 811.3 461.8 744.6 -11.7 42.4 

EBITDA 189.8 285.9 104.4 210.8 -9.9 81.8 

EBITDA Margin (%) 28.9 35.2 22.6 28.3 56 bps 626 bps 

Depreciation 77.7 122.7 41.2 78.3 -0.8 88.4 

Interest 168.6 170.8 54.7 143.6 17.4 208.2 

Other Income 35.0 17.1 14.5 20.0 74.8 140.4 

Reported PAT -20.9 -9.2 36.8 -14.5 44.0 -156.7 

EPS (|) -0.1 -0.1 0.2 -0.1 44.0 -156.7 

Source: Company, ICICIdirect.com Research

GVK’s power segment performance was dismal in Q4FY12 

as power plants reported lower PLF due to continued 

restricted supply of gas 

Ex MIAL Q4 FY12 performance 

Ex-MIAL, GVK’s Q4FY12 was below our estimates mainly due to lower 

revenues from the power segment on account of restricted gas 

availability and, thus, lower PLF. Consequently, the topline (ex MIAL) for 

Q4FY12 was at | 333 crore vs. our estimate of | 440.1 crore. The loss at 

| 20.9 crore, therefore, was higher than our estimate of net loss of | 9.2 

crore mainly on account of the dismal power segment performance and 

higher interest for loan taken to fund airport acquisition. 

Exhibit 2: Financial performance (ex MIAL) 

(| Crore) Q4FY12 Q4FY12E Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %) 

Total Operating Income 333.0 440.1 461.8 744.6 -55.3 -27.9 

EBITDA 86.7 107.5 104.4 210.8 -58.9 -17.0 

EBITDA Margin (%) 26.0 24.4 22.6 28.3 -226 bps 343 bps 

Depreciation 39.7 47.3 41.2 78.3 -49.4 -3.9 

Interest 247.5 122.2 54.7 143.6 72.4 352.5 

Reported PAT -20.9 -9.2 36.8 -14.5 44.0 -156.7 

EPS (|) -0.1 -0.1 0.2 -0.1 44.0 -156.7 

Source: Company, ICICIdirect.com Research 

Segmental Performance 

Power division 

GVK’s power segment performance was dismal and revenues saw a 

sequential and YoY decline of 31.7% and 30.9%, respectively, in Q3FY12 

as power plants reported lower PLF due to restricted supply of gas. The 

company would receive interim RLNG supply during the peak demand 

season of March-May, which implies that there could be marginal 

improvement in PLF particularly in Q1FY13E. 

While Gautami Power reported revenues of | 114.5 crore, a sequential 

decline of ~47%, GVK Industries posted a sequential decline of ~15% at 

| 166.4 crore in Q4FY12. 

Commissioning of one of the four units of the Alaknanda Hydro Project is 

expected in December, 2012 and all four units are expected to be 

operational by May, 2013 vs. the original commissioning date of March, 

2012. The project has witnessed a cost escalation and the revised cost 

now stands at | 4600 crore (subject to regulators approval) vs. | 2700 

crore originally. Commissioning of the first unit of the Goindwal Sahib 

Project is expected by February 2012 and the second unit by June, 2013. 

Exhibit 3: Power vertical performance 

| crore Q4FY12 Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %) 

Revenue 280.9 403.0 411.4 -31.7 -30.3 

EBITDA 39.9 83.6 82.2 -51.4 -52.3 

Margin (%) 14.2% 20.7% 20.0% 

PAT -37.8 5.8 3.0 -1351.7 -751.7 

Margin (%) -13.5% 1.4% 0.7% 


Exhibit 4: Operational highlights of power plants 

JP I JP II Gautami 

| per unit Q4FY12 Q3FY12 Q4FY11 Q4FY12 Q3FY12 Q4FY11 Q4FY12 Q3FY12 Q4FY11 

Realisation 2.8 2.8 2.8 2.8 3.1 3.1 2.3 3.1 3.0 

Fuel cost 2.0 2.0 2.1 2.1 2.2 2.0 1.9 2.1 2.0 

O&M 0.4 0.4 0.9 0.0 0.3 0.2 0.3 0.6 0.3 

EBITDA 0.4 0.3 -0.1 0.7 0.6 0.8 0.5 1.6 1.8 

PLF (%) 81 76 67 49 67 73 53 69 74 

Units sold (million) 373 351 308 228 318 338 503 686 725 


ICICI Securities Ltd | Retail Equity Research Page 2

The road division revenues grew 16% YoY to | 58.6 crore 

in Q4FY12 contributed by traffic growth (~7%) and toll 

growth (~9%) 

Road division 

In the road division, revenues grew 16% YoY to | 58.6 crore in Q3FY12 

contributed by traffic growth (~7%) and toll growth (~9%). The EBITDA 

margin came at 68.8%. The PAT at | 10.5 crore was lower mainly on 

account of higher interest expenses (~| 21.5 crore on debt raised by 

securitisation of JKEL revenues to partly fund additional stake buy in 

MIAL) 

The financial closure for Shivpuri-Dewas is expected in the next month. 

The | 3,178 crore (including IDC charges) project is for four-laning of the 

Shivpuri-Dewas section in Madhya Pradesh. GVK will pay a premium of 

| 189.9 crore per annum to NHAI on this for 30 years, with a provision of 

an increase of 5% every year. Comparing GVK‘s bid with L-2 bid, GVK’s 

bid appears to be aggressive as it has paid ~65% premium higher than L- 

2 bidder. 

The management also informed that Deoli Kota may see some delay in 

execution on account of pending MOEF clearance for the tunnel as a part 

of project while Bagodara Vasad is on schedule. To fund its equity 

commitment towards road projects, the company is exploring the option 

of private equity deal in transportation division. 

Exhibit 5: Road division performance 


Revenue 58.6 50.5 58.8 -0.4 16.0 

EBITDA 40.3 26.0 40.7 -1.1 55.3 

Margin (%) 68.8% 51.4% 69.3% 

PAT 13.1 22.0 10.5 24.6 -40.4 

Margin (%) 22.4% 43.6% 17.9% 


Exhibit 6: Toll revenue break-up 

| crore Q4FY12 Q4FY11 YoY(%) Q3FY12 Q0Q(%) 

Car, Passenger Vehicles 5.4 4.4 22.9 5.7 -5.2 

Light Goods Vehicles 2.2 1.7 33.8 2.2 2.6 

Bus 2.5 2.3 9.4 2.8 -9.2 

Truck 4.9 4.7 4.1 5.1 -4.8 

Multi Axel Vehicles 43.5 37.4 16.4 43.0 1.2 

Heavy Vehicles 0.0 0.0 -18.6 0.0 -10.7 

Total 58.6 50.5 16.1 58.8 -0.4 


Exhibit 7: Traffic break-up 

Category Q4FY12 Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %) 

Car, Passenger Vehicles 824,983 753,730 857,701 -3.8 9.5 

Light Goods Vehicles 165,491 138,843 161,836 2.3 19.2 

Bus 99,059 100,182 108,427 -8.6 -1.1 

Truck 181,427 190,064 190,882 -5.0 -4.5 

Multi Axel Vehicles 1,001,846 937,122 989,897 1.2 6.9 

Heavy Vehicles 433 584 466 -7.1 -25.9 

Total 2,273,239 2,120,525 2,309,209 -1.6 7.2 



In terms of cost escalation, MIAL has seen a cost overrun 

of | 2700 crore and cost approval & tariff revision 

application has been made to AERA. The decision on this is 

expected in the next three or four months 

Airport division 

MIAL and BIAL reported a muted topline performance with sequential 

decline of 3.3% and 2.2% to | 321.6 crore and | 150.5 crore, respectively. 

In terms of operating performance, the passenger movement remained 

muted in both airports. MIAL’s total passenger declined 2.7% sequentially 

to 7.8 million in Q4FY12. While the number of domestic passengers 

declined 4.2% QoQ to 5.3 million, the number of international passengers 

grew 0.6% QoQ to 2.5 million. BIAL also reported a decline of 7.8% 

sequentially in passenger movement to 3.1 million in Q4FY12. 

In terms of cost escalation, MIAL has seen a cost overrun of ~| 2700 

crore to |12,500 crore and cost approval and tariff revision application 

has been made to AERA. The cost overrun in MIAL was on account of a 

delay in shifting of the Shivaji statue, increase in scope of work and rise in 

cost of construction. There continues to remain uncertainty over the 

funding of the project especially after the cost overrun as AAI may find it 

difficult to infuse additional equity (as reported in the media article). The 

company is also contemplating an application with the regulator for an 

increase in AERO charges to meet the funding gap. 

GVK is also looking for a private equity deal in the airport segment to 

raise ~| 3000 crore to repay the debts raised for acquisition of a stake. 

Currently, the foreign players are confused with the government stand 

and, hence, are delaying their decision. 

Exhibit 8: MIAL’s performance 


Revenue 321.6 330.7 332.5 -3.3 -2.7 

EBITDA 103.1 137.1 122.0 -15.4 -24.8 

Margin (%) 32.1 41.4 36.7 

PAT 32.9 64.3 42.9 -23.3 -48.8 

Margin (%) 10.2 19.4 12.9 


Exhibit 9: BIAL’s performance 


Revenue 150.5 139.1 153.8 -2.2 8.1 

EBITDA 96.8 93.0 108.6 -10.8 4.1 

Margin (%) 64.4 66.9 70.6 

Adj. PAT 33.2 40.4 56.3 -41.0 -17.7 

Margin (%) 22.1 29.0 36.6 


Exhibit 10: Operational highlights of airport division 

BIAL MIAL 

Q4FY12 Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %) Q4FY12 Q4FY11 Q3FY12 QoQ (Chg %) YoY (Chg %) 

INTERNATIONAL 

Aircraft Movements per Day 52 47 52 -1.4 9.2 199 193 204 -2.4 3.1 

Passenger Movements (Mn) 

DOMESTIC 

0.6 0.6 0.6 -3.8 7.1 2.5 2.3 2.5 0.6 8.9 

Aircraft Movements per Day 263 266 282 -6.7 -1.1 487 489 493 -1.1 -0.4 

Passenger Movements (Mn) 

TOTAL (INT+DOM) 

2.5 2.4 2.7 -8.7 4.3 5.3 5.2 5.5 -4.2 1.7 

Aircraft Movements per Day 315 314 335 -5.8 0.5 686 682 696 -1.5 0.6 

Passenger Movements (Mn) 3.1 2.9 3.3 -7.8 4.8 7.8 7.5 8.0 -2.7 3.9 



We recommend BUY on the stock with SOTP based price 

target of | 18 

Valuation 

We have incorporated the FY12 performance and also taken into account 

higher interest outgo for loans taken for acquisition of stake in MIAL and 

BIAL. Consequently, we have reduced our earning estimates for FY13 by 

~35%. 

At the CMP, the stock is trading at 0.5x FY13 P/BV. We highlight that 

uncertainty over AERA guidelines, gas supply constraints, delay in the 

real estate monetisation, lack of clarity over the Hancock deal and ADF 

issue still remain and continue to weigh on the valuation. 

We expect GVK to report a muted performance for some more time given 

the unavailability of gas supply at its power plants as well as additional 

interest burden to fund an incremental stake in MIAL and BIAL. In our 

view, a PE deal in the airport & road division holds the key for stock price 

performance, going ahead, as this would partially allay investors concerns 

over funding gap across airport & transportation verticals. 

We have assigned a BUY rating with reduced target price of | 18 per 

share as we now incorporate higher debt for stake acquisition in airports 

and Shivpuri Dewas which contributes negatively to our valuation. The 

BUY rating is purely on attractive valuations (currently trading at 0.5x 

P/BV) and on the hopes of a better financial position with anticipated PE 

deals, though higher than anticipated dilution remains a key risk. We also 

advise only those investors with a longer horizon of 18-24 months to 

consider investing in the stock. 

Exhibit 11: SOTP valuation 

Basis CoE 

Equity Value 

Stake Value (| 

(| crore) GVK's stake (%) crore) Per share (|) 

Power 1155 801.6 5 

GVK Industries FCFE 13.0 173 75.0 129.8 1 

Gautami FCFE 13.0 237 47.8 113.1 1 

Goindwal Sahib FCFE 14.0 247 75.0 185.2 1 

Alaknanda FCFE 14.0 498 75.0 373.6 2 

Transport -142 -141.6 -1 

JKEL FCFE 13.0 717 100.0 716.7 5 

Deoli Kota FCFE 14.0 22 100.0 22.4 0 

Shivpuri Dewas FCFE 15.0 -881 100.0 -880.7 -6 

Airport 9221 4490.8 28 

MIAL-Airport FCFE 14.0 2117 50.5 1068.9 7 

MIAL-Real Estate NAV 15.0 4896 50.5 2472.4 16 

BIAL-Airport FCFE 15.0 2208 43.0 949.5 6 

Total 10234 5150.8 33 

Less: Net Debt 2320.8 15 

Target 2830.0 18 



Financial summary 

Profit and loss statement 

(| Crore) FY11 FY12 FY13E FY14E 

Net Sales 1,914.7 2,491.8 3,769.0 5,650.2 

Growth (%) 7.2 30.1 51.3 49.9 

Total Operating Expenditure 1,400.7 1,807.8 2,331.3 3,307.5 

EBITDA 514.0 684.0 1,437.8 2,342.8 

Growth (%) 9.8 33.1 110.2 62.9 

Interest 263.1 457.2 850.0 1,309.7 

Depreciation 183.6 248.9 494.0 785.8 

Other Income 28.5 88.9 64.3 129.2 

PBT 95.7 66.7 158.0 376.5 

Total Tax 21.3 67.8 41.4 116.9 

PAT before MI 74.4 -1.1 116.6 259.6 

Minority Interest 30.4 43.9 111.3 166.5 

Profit from Associates 110.9 106.4 70.9 58.8 

Less: Prior Period Items 0.0 0.0 0.0 0.0 

PAT 154.9 61.5 76.2 151.9 

Growth (%) -0.6 -60.3 24.0 99.4 

EPS 1.0 0.4 0.5 1.0 


Balance Sheet 

(| Crore) FY11 FY12P FY13E FY14E 

Liabilities 

Equity Capital 157.9 157.9 157.9 157.9 

Reserve and Surplus 3,228.9 3,323.5 3,366.5 3,518.4 

Total Debt 5,548.4 13,884.5 15,125.9 14,704.9 

Deferred Tax Liability 57.0 300.8 300.8 300.8 

Minority Interest 1,153.4 3,116.8 3,228.1 3,394.6 

Deferred Income 170.3 164.3 164.3 164.3 

Sources of Funds 10,315.8 20,947.8 22,343.5 22,240.9 

Assets 

Total Gross Block 3,846.6 8,745.8 16,979.9 19,828.6 

Less Accumulated Depreciatio 954.9 1,727.9 2,221.9 3,007.8 

Net Block 2,891.7 7,017.9 14,757.9 16,820.8 

Capital WIP 3,745.0 7,747.4 2,734.2 2,157.8 

Net Intangible Assets 780.2 780.2 780.2 780.2 

Goodwill on Consolidation 0.0 1,161.6 1,161.6 1,161.6 

Investments 2,501.7 2,132.0 2,132.0 732.0 

Inventory 43.1 75.4 103.8 164.9 

Debtors 69.3 456.2 690.0 1,034.4 

Loans and Advances 171.6 1,569.3 1,063.8 2,883.5 

Other Current Assets 178.7 228.3 374.8 190.2 

Cash 332.6 1,726.3 440.7 186.5 

Total Current Assets 795.3 4,055.4 2,673.2 4,459.6 

Total Current Liabilities 398.1 1,946.7 1,895.6 3,871.0 

Net Current Assets 397.2 2,108.7 777.6 588.5 

Application of funds 10,315.8 20,947.7 22,343.5 22,240.9 


Cash flow statement 

(| Crore) FY11 FY12P FY13E FY14E 

Profit after Tax 154.9 61.5 76.2 151.9 

Depreciation 183.6 248.9 494.0 785.8 

Cash Flow before WC changes 338.6 310.4 570.2 937.8 

Net Increase in Current Assets -67.1 -1,866.5 96.7 -2,040.6 

Net Increase in Current Liabilities 193.8 1,548.7 -51.1 1,975.4 

Net cash flow from op. activities 465.2 -7.5 615.8 872.6 

(Purchase)/Sale of Investment -563.5 369.7 0.0 1,400.0 

(Purchase)/Sale of Fixed Assets -1,662.1 -8,377.5 -3,220.9 -2,272.3 

Net Cash flow from Investing Activities -1,362.2 -6,968.2 -3,109.6 -705.9 

Inc / (Dec) in Equity Capital 0.0 0.0 0.0 0.0 

Inc / (Dec) in Secured loan 902.9 8,336.2 1,241.4 -421.0 

Inc / (Dec) in Unsecured loans 200.0 0.0 0.0 0.0 

Net Cash flow from Financing Activities 1,178.8 8,369.3 1,208.2 -421.0 

Net Cash flow 281.9 1,393.6 -1,285.5 -254.2 

Opening Cash/Cash Equivalent 50.8 332.6 1,726.3 440.7 

Closing Cash/ Cash Equivalent 


332.6 1,726.3 440.7 186.5 

Key ratios 

FY11 FY12P FY13E FY14E 

Per share data (|) 

EPS 1.0 0.4 0.5 1.0 

Cash EPS 2.1 2.0 3.6 5.9 

BV 21.4 22.0 22.3 23.3 

Operating profit per share 3.3 4.3 9.1 14.8 

Operating Ratios (%) 

EBITDA Margin 26.8 27.5 38.1 41.5 

PBT / Net Sales 5.0 2.7 4.2 6.7 

PAT Margin 8.1 2.5 2.0 2.7 

Inventory days 7.5 8.7 8.7 8.7 

Debtor days 13.2 66.8 66.8 66.8 

Creditor days 

Return Ratios (%) 

19.4 62.8 62.8 62.8 

RoE 4.6 1.8 2.2 4.1 

RoCE 3.3 2.1 4.3 7.1 

RoIC 

Valuation Ratios (x) 

4.2 3.4 5.5 9.3 

P/E 12.1 30.6 24.7 12.4 

EV / EBITDA 13.8 20.5 11.5 7.0 

EV / Net Sales 3.7 5.6 4.4 2.9 

Market Cap / Sales 1.0 0.8 0.5 0.3 

Price to Book Value 

Solvency Ratios (x) 

0.6 0.5 0.5 0.5 

Debt / EBITDA 10.8 20.3 10.5 6.3 

Debt / Equity 1.6 4.0 4.3 4.0 

Current Ratio 2.0 2.1 1.4 1.2 

Quick Ratio 


1.2 1.2 1.2 1.1 


ICICIdirect.com coverage universe (Infrastructure) 

JP Associates Sales (| Crore) EPS (|) PE (x) P/BV(x) RoNW (%) RoCE (%) 

Idirect Code JAIASS CMP 60 FY10 10,088.9 4.2 20.4 2.1 11.7 8.0 

Mcap (| crore) 12814 Target 95 FY11 12,966.5 3.5 24.2 1.9 13.0 7.9 

% Upside 58% FY12E 13,048.9 3.1 27.9 1.8 6.7 7.2 

FY13E 14,999.3 3.1 28.1 1.7 6.2 6.7 

GMR Infra 

Idirect Code GMRINF CMP 22 FY10 4,566.5 0.4 71.7 1.3 2.3 3.9 

Mcap (| crore) 8485 Target 32 FY11 5,773.8 -0.3 NA 1.0 -9.8 3.1 

% Upside 47% FY12E 7,796.8 -0.5 NA 1.1 -2.9 2.9 

FY13E 9,689.6 0.5 67.5 1.1 1.9 4.2 

GVK Power 

Idirect Code GVKPOW CMP 12 FY11 1,914.7 1.0 12.1 0.6 4.6 3.3 


% Upside 51% FY13E 3,769.0 0.5 24.7 0.5 2.2 4.3 

FY14E 5,650.2 1.0 12.4 0.5 4.1 7.1 

IRB Infrastructure 

Idirect Code IRBINF CMP 129 FY10 1,704.9 11.6 11.4 2.2 18.9 12.3 

Mcap (| crore) 4288 Target UR FY11 2,438.1 13.6 9.7 1.8 18.6 12.2 

% Upside FY12E 3,041.1 13.9 9.5 1.5 16.3 10.6 

FY13E 3,959.1 13.9 9.5 1.4 14.2 10.0 

Sadbhav Engineering 

Idirect Code SADENG CMP 133 FY10 1,334.4 2.4 61.9 6.3 10.2 8.9 


% Upside 25% FY12E 2,625.2 7.7 19.5 2.1 10.6 6.4 

FY13E 3,058.5 8.3 18.1 1.8 9.9 6.3 


Exhibit 12: Recommendation History 

40 

30 

20 

10 

0 

May-11 

ICICI Securities Ltd | Retail Equity Research Page 7 

Jun-11 

Aug-11 

Source: Reuters, ICICIdirect.com Research 

Sep-11 

Nov-11 

Dec-11 

Price Target Price 

Feb-12 

Mar-12 

May-12 

Exhibit 13: Recent Releases 

Date Event CMP Target Price Rating 

8-Aug-11 Q1FY12 Result Update 18 32 Buy 

21-Sep-11 Event Update 17 31 Buy 

11-Nov-11 Q2FY12 Result Update 13 32 Buy 

15-Feb-12 Q3FY12 Result Update 19 28 Buy 

13-Apr-12 Management Meet Update 17 28 Buy 

Source: Company, ICICIdirect.com Research

RATING RATIONALE 

ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns 

ratings to its stocks according to their notional target price vs. current market price and then categorises them 

as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional 

target price is defined as the analysts' valuation for a stock. 

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; 

Buy: >10%/15% for large caps/midcaps, respectively; 

Hold: Up to +/-10%; 

Sell: -10% or more; 

Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com 

ANALYST CERTIFICATION 

ICICIdirect.com Research Desk, 

ICICI Securities Limited, 

1 st Floor, Akruti Trade Centre, 

Road No. 7, MIDC, 

Andheri (East) 

Mumbai – 400 093 

research@icicidirect.com 

We /I, Deepak Purswani CFA, PGDM (FINANCE) Bhupendra Tiwary MBA (FINANCE) research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this 

research report accurately reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to 

the specific recommendation(s) or view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc. 

Disclosures: 

ICICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leading 

underwriter of securities and participate in virtually all securities trading markets in India. We and our affiliates have investment banking and other business relationship with a significant percentage of 

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generally prohibits its analysts, persons reporting to analysts and their dependent family members from maintaining a financial interest in the securities or derivatives of any companies that the analysts 

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The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and 

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from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities 

policies, in circumstances where ICICI Securities is acting in an advisory capacity to this company, or in certain other circumstances. 

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ICICI Securities and its affiliates might have managed or co-managed a public offering for the subject company in the preceding twelve months. ICICI Securities and affiliates might have received 

compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of public offerings, corporate finance, investment 

banking or other advisory services in a merger or specific transaction. It is confirmed that Deepak Purswani CFA, PGDM (FINANCE) Bhupendra Tiwary MBA (FINANCE) research analysts and the authors of 

this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Our research professionals are paid in part based on the profitability of ICICI 

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ICICI Securities or its subsidiaries collectively do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the 

research report. 

It is confirmed that Deepak Purswani CFA, PGDM (FINANCE) Bhupendra Tiwary MBA (FINANCE) research analysts and the authors of this report or any of their family members does not serve as an 

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GVK Power (GVKPOW) - ICICI Direct

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