ISGEC Heavy Engineering

ISGEC Heavy Engineering reported topline of Rs. 1074.85 cr down 31.1% Q-o-Q from Rs. 15460.13 cr reported in Q4 FY20. EBTDA for the quarter came in at Rs. 96.31 cr with EBITDA margins of 9.2%. EBITDA growth of 36.1% Q-o-Q basis was mainly on account of salary cuts and reduction on SGA (selling, general and administrative) expenses in Q1 FY21. The company reported PAT of Rs. 42.53 cr up 218.1% Q-o-Q basis with PAT margin of 4.1%.

ISGEC Heavy Engineering trades at fair valuation of 13x TTM earnings with opportunities on cards in defence and space. Company’s strong order book (1.11x FY20 sales) provides a cushion on the downside whereas cost saving efforts in terms of reducing in salary and SGA expenses would help improve margins in the current financial year.