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UBS Investment Research
IVRCL
M argins collapse
Event: Q1FY12: EBITDA margins at 7.6%; Revenues up 2% y/y
IVRCL reported revenues of Rs11.2bn (+1.6% YoY, UBS-e Rs12.2bn, consensus
Rs12.4bn), operating profit of Rs856m (-15% YoY; UBS-e/consensus Rs1.1bn),
EBITDA margins of 7.6% (-150bps YoY; UBS-e 8.8%, consensus 9.1%) and PAT
of Rs42m (-85% YoY, UBS-e/consensus estimate of Rs192m/220m). While the
company has not provided any specific revenue guidance for this year till now, we
forecast 16% YoY growth in FY12.
Impact: Interest costs decline ~4% QoQ
Effective tax rate during the quarter was 14.3% due to deferred taxes of Rs17.2m
that boosted reported profits (current taxes were Rs24m on PBT of Rs49m).
Interest cost has declined by ~4% q/q to Rs628m in Q1- we think this could likely
be due to better working capital management and hence lower debt levels as
interest rates would have likely increased in Q1FY12 for the company QoQ.
Action: Conference call on 16th August at noon
This is one of the lowest quarterly margins reported by the company in the last few
years. We expect to receive details of any extra-ordinary item that might have
impacted results, details of the IT enquiries being carried out, status of the order
book, outlook for the year, working capital levels and debt on the balance sheet in
the conference call.
Valuation: Buy rating
We have a SOTP-based price target of Rs100.
IVRCL
Incorporated in 1987 as IVR Construction, IVRCL Infrastructures & Projects
has been in commercial operations since 1990, undertaking contracts to execute
civil engineering works. The company's main focus is on water, environment
and irrigation projects. It runs its real estate business through wholly owned
subsidiary, IVR Prime, and its BOT projects through two separate subsidiaries.
IVRCL execution of works includes townships, airport terminals, industrial
buildings, bridges, canals, roads, and tenements.
Statement of Risk
The company faces regulatory risk as the government is the largest client. It also
faces significant execution risks, some commodity price risk and interest rate
risk.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
IVRCL
M argins collapse
Event: Q1FY12: EBITDA margins at 7.6%; Revenues up 2% y/y
IVRCL reported revenues of Rs11.2bn (+1.6% YoY, UBS-e Rs12.2bn, consensus
Rs12.4bn), operating profit of Rs856m (-15% YoY; UBS-e/consensus Rs1.1bn),
EBITDA margins of 7.6% (-150bps YoY; UBS-e 8.8%, consensus 9.1%) and PAT
of Rs42m (-85% YoY, UBS-e/consensus estimate of Rs192m/220m). While the
company has not provided any specific revenue guidance for this year till now, we
forecast 16% YoY growth in FY12.
Impact: Interest costs decline ~4% QoQ
Effective tax rate during the quarter was 14.3% due to deferred taxes of Rs17.2m
that boosted reported profits (current taxes were Rs24m on PBT of Rs49m).
Interest cost has declined by ~4% q/q to Rs628m in Q1- we think this could likely
be due to better working capital management and hence lower debt levels as
interest rates would have likely increased in Q1FY12 for the company QoQ.
Action: Conference call on 16th August at noon
This is one of the lowest quarterly margins reported by the company in the last few
years. We expect to receive details of any extra-ordinary item that might have
impacted results, details of the IT enquiries being carried out, status of the order
book, outlook for the year, working capital levels and debt on the balance sheet in
the conference call.
Valuation: Buy rating
We have a SOTP-based price target of Rs100.
IVRCL
Incorporated in 1987 as IVR Construction, IVRCL Infrastructures & Projects
has been in commercial operations since 1990, undertaking contracts to execute
civil engineering works. The company's main focus is on water, environment
and irrigation projects. It runs its real estate business through wholly owned
subsidiary, IVR Prime, and its BOT projects through two separate subsidiaries.
IVRCL execution of works includes townships, airport terminals, industrial
buildings, bridges, canals, roads, and tenements.
Statement of Risk
The company faces regulatory risk as the government is the largest client. It also
faces significant execution risks, some commodity price risk and interest rate
risk.
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