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IVRCL Group bags orders worth `2,229cr
IVRCL Group has bagged orders aggregating to `2,229cr across various segments during
2QFY2012. IVRCL Assets and Holdings (IVRCLAH) has been awarded a road project in
Arunachal Pradesh worth `1,486cr by MORTH. The project will be implemented by Sushee
Infra and IVRCLAH consortium, with IVRCLAH’s share being 26%. It is an annuity-based
project involving cash support of `1,004cr by MORTH with concession period and
construction period of 17 years and 4.5 years, respectively. Further, orders bagged by
IVRCL across various segments are power (`108.4cr), buildings (`234.9cr), transportation
(`104.7cr), water divisions (`263.3cr) and mining (`31.7cr). With these orders IVRCL’s
order book stands at ~`23,779cr (4.2x FY2011 revenue). This bagging of orders is
positive for the company as it ends the dry spell of order inflow since the last few months.
We have valued IVRCL on SOTP basis. The company’s core construction business is valued
at P/E of 7x FY2013E EPS of `6.1 (`42.7/share), whereas its stake in subsidiaries IVRCLAH
(`13.8/share) and Hindustan Dorr-Oliver (`5.3/share) has been valued on mcap basis,
post assigning a 20% holding company discount. At the CMP of `38, the stock is trading at
P/E of 6.2x FY2013E EPS and 0.5x FY2013E P/BV on standalone basis and adjusting for its
subsidiaries at P/E of 3.0x FY2013E EPS and 0.2x FY2013E P/BV, which we believe is
attractive. Therefore, on the back of the company’s robust order book to sales ratio and
attractive valuations, we maintain our Buy rating on the stock with a target price of `62.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IVRCL Group bags orders worth `2,229cr
IVRCL Group has bagged orders aggregating to `2,229cr across various segments during
2QFY2012. IVRCL Assets and Holdings (IVRCLAH) has been awarded a road project in
Arunachal Pradesh worth `1,486cr by MORTH. The project will be implemented by Sushee
Infra and IVRCLAH consortium, with IVRCLAH’s share being 26%. It is an annuity-based
project involving cash support of `1,004cr by MORTH with concession period and
construction period of 17 years and 4.5 years, respectively. Further, orders bagged by
IVRCL across various segments are power (`108.4cr), buildings (`234.9cr), transportation
(`104.7cr), water divisions (`263.3cr) and mining (`31.7cr). With these orders IVRCL’s
order book stands at ~`23,779cr (4.2x FY2011 revenue). This bagging of orders is
positive for the company as it ends the dry spell of order inflow since the last few months.
We have valued IVRCL on SOTP basis. The company’s core construction business is valued
at P/E of 7x FY2013E EPS of `6.1 (`42.7/share), whereas its stake in subsidiaries IVRCLAH
(`13.8/share) and Hindustan Dorr-Oliver (`5.3/share) has been valued on mcap basis,
post assigning a 20% holding company discount. At the CMP of `38, the stock is trading at
P/E of 6.2x FY2013E EPS and 0.5x FY2013E P/BV on standalone basis and adjusting for its
subsidiaries at P/E of 3.0x FY2013E EPS and 0.2x FY2013E P/BV, which we believe is
attractive. Therefore, on the back of the company’s robust order book to sales ratio and
attractive valuations, we maintain our Buy rating on the stock with a target price of `62.
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