IL&FS Transportation Network Q4 above expectation – led by robust execution ACCUMULATE :Emkay

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IL&FS Transportation Network

Q4 above expectation – led by robust execution

ACCUMULATE

CMP: Rs 210                                        Target Price: Rs 261

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n     ITNL reported Q4FY11 APAT at Rs0.7bn v/s Rs0.5bn), EBITDA at Rs 1.39bn v/s Rs 0.85bn mainly led by higher than expected fee booking on 3 projects (JARP–I, Chawar, MP Border)

n     Revenue increased 3x to Rs 7.6bn qoq led by 6.3x increase in construction to Rs 6 bn - revenue threshold surpassed in 3 projects (MBEL, JARP-I, PSRDC) - Order backlog at Rs92.9bn

n     Consolidated revenue grew 126% qoq to Rs 16.6 bn led by 3x increase in construction revenues to Rs 12.1 bn. Earnings cut led by 55% qoq increase in interest expense to Rs 1.8bn

n     Target at Rs 261 reduced by 5% led by delays in obtaining clearance at Pune Sholapur, Higher fee booking in FY11 leading to tapered fee income in FY12E- Maintain Accumulate