Sell Bartronics: Edelweiss

Edelweiss research has maintained sell rating on Bartronics in research report dated on November 21, 2007. "Bartronics India's (BIL's) standalone Q2FY08 results were in line with expectations. Revenues grew 83% Y-o-Y and 13% Q-o-Q, to Rs 288 million. The automatic identification and data capture (AIDC) segment accounted for 58% of the company's standalone revenues (approx Rs 168 million) and smart cards business the remaining 42% (approx Rs 120 million). EBITDA grew 35% Y-o-Y, but declined 9% Q-o-Q, to Rs 57 million. Likewise, net profit grew 28% Y-o-Y, but declined 13% Q-o-Q, to Rs 42 million. EBITDA margins stood at 19.8% as against 26.7% in Q2FY07 and 24.6% in Q1FY08. We are upgrading our revenue estimates by 6.2% and 11% for FY08E and FY09E respectively on account of higher than anticipated growth in AIDC exports. However, on account of lower than anticipated margins in the smart cards segment, we maintain our net profit estimates. Due to lack of clarity on costing of smart cards and expensive valuations, we maintain our 'SELL' recommendation on the stock." according to the Edelweiss research report.