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IVRCL bags orders worth `1,867cr
IVRCL has bagged orders aggregating to `1,867cr across the mining and water
divisions. The mining division is the major contributor with order worth `1,176cr.
This order has been awarded by Hindustan Copper Ltd. (HCL) and involves
development of an underground mine for 5mn tonnes per annum capacity at
Malanjkhand Copper Project, Balaghat in Madhya Pradesh. The project will be
completed in five years. The water division contributed orders worth `691cr. With
these orders, IVRCL’s order book stands at `25,500cr (4.5x FY2011 revenue).
We have valued IVRCL on an SOTP basis. The company’s core construction
business has been valued at P/E of 7x FY2013E EPS of `6.1 (`42.6/share),
whereas its stake in subsidiaries IVR Prime (`12.8/share) and Hindustan
Dorr-Oliver (`3.5/share) has been valued on mcap basis, post assigning a 30%
holding company discount. At the CMP of `38, the stock is trading at 6.2x
FY2013E EPS and 0.5x FY2013E P/BV on a standalone basis and adjusting for its
subsidiaries at 3.5x FY2013E EPS. Therefore, on the back of the company’s robust
order book-to-sales ratio (4.5x FY2011 revenue) and attractive valuations, we
maintain our Buy view on the stock with a target price of `59.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IVRCL bags orders worth `1,867cr
IVRCL has bagged orders aggregating to `1,867cr across the mining and water
divisions. The mining division is the major contributor with order worth `1,176cr.
This order has been awarded by Hindustan Copper Ltd. (HCL) and involves
development of an underground mine for 5mn tonnes per annum capacity at
Malanjkhand Copper Project, Balaghat in Madhya Pradesh. The project will be
completed in five years. The water division contributed orders worth `691cr. With
these orders, IVRCL’s order book stands at `25,500cr (4.5x FY2011 revenue).
We have valued IVRCL on an SOTP basis. The company’s core construction
business has been valued at P/E of 7x FY2013E EPS of `6.1 (`42.6/share),
whereas its stake in subsidiaries IVR Prime (`12.8/share) and Hindustan
Dorr-Oliver (`3.5/share) has been valued on mcap basis, post assigning a 30%
holding company discount. At the CMP of `38, the stock is trading at 6.2x
FY2013E EPS and 0.5x FY2013E P/BV on a standalone basis and adjusting for its
subsidiaries at 3.5x FY2013E EPS. Therefore, on the back of the company’s robust
order book-to-sales ratio (4.5x FY2011 revenue) and attractive valuations, we
maintain our Buy view on the stock with a target price of `59.
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