Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IL&FS Transportation Networks (ILFT.BO)
Buy Equity Research
Above expectation on execution; strong momentum to continue
What surprised us
IL&FS Transportation Networks (ITNL) reported 4QFY11 earnings of Rs1.6
bn vs. our estimate of Rs1.12 bn and Bloomberg estimate of Rs1.07 bn.
Revenue for the quarter came in at Rs16.6 bn vs. our and consensus
estimate of Rs9 bn. The key difference was in construction income for the
quarter, which was considerably higher due to threshold progress
achieved in all projects except Chenani-Nashri and Narkatpally-Addanki.
Average toll collection for the quarter came in at Rs 8.85 mn per day vs. Rs
8.68 mn per day in 3QFY11. EBITDA margin at 28.5% for FY11 was 680 bp
below FY10, mainly due to SPV contract accounting change initiated in
2QFY11.
What to do with the stock
The strong results in 4Q further support our view on the ability of the
company to execute projects in a timely manner. In addition, achieving
financial closure for all projects except the Madhya Pradesh Entry point
project also underscores the ability of ITNL to obtain funds for their
projects in a relatively tough macro environment. With close to 10,000 lane
kms of roads in its portfolio, we expect revenue growth CAGR of 38% in
FY11-13E, mainly driven by construction of the existing order book. We
expect EBITDA margins to stabilize close to 22% over the next 2 years as
all contracts move to the revised accounting mechanism. We change our
FY12E/13E EPS by up to +2% on the back of this improved project
execution. The stock is trading at FY12E P/B of 1.7X vs. 1-year median of
2.7X. We retain our Buy rating and 12-m SOTP based TP of Rs 277. Risks:
Further increase in interest rate; delay in new contract award.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IL&FS Transportation Networks (ILFT.BO)
Buy Equity Research
Above expectation on execution; strong momentum to continue
What surprised us
IL&FS Transportation Networks (ITNL) reported 4QFY11 earnings of Rs1.6
bn vs. our estimate of Rs1.12 bn and Bloomberg estimate of Rs1.07 bn.
Revenue for the quarter came in at Rs16.6 bn vs. our and consensus
estimate of Rs9 bn. The key difference was in construction income for the
quarter, which was considerably higher due to threshold progress
achieved in all projects except Chenani-Nashri and Narkatpally-Addanki.
Average toll collection for the quarter came in at Rs 8.85 mn per day vs. Rs
8.68 mn per day in 3QFY11. EBITDA margin at 28.5% for FY11 was 680 bp
below FY10, mainly due to SPV contract accounting change initiated in
2QFY11.
What to do with the stock
The strong results in 4Q further support our view on the ability of the
company to execute projects in a timely manner. In addition, achieving
financial closure for all projects except the Madhya Pradesh Entry point
project also underscores the ability of ITNL to obtain funds for their
projects in a relatively tough macro environment. With close to 10,000 lane
kms of roads in its portfolio, we expect revenue growth CAGR of 38% in
FY11-13E, mainly driven by construction of the existing order book. We
expect EBITDA margins to stabilize close to 22% over the next 2 years as
all contracts move to the revised accounting mechanism. We change our
FY12E/13E EPS by up to +2% on the back of this improved project
execution. The stock is trading at FY12E P/B of 1.7X vs. 1-year median of
2.7X. We retain our Buy rating and 12-m SOTP based TP of Rs 277. Risks:
Further increase in interest rate; delay in new contract award.
No comments:
Post a Comment