IVRCL Infrastructure & Project Asset sale by IVRCL A&H to accelerate - :Emkay

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IVRCL Infrastructure & Project

Asset sale by IVRCL A&H to accelerate - Maintain BUY

BUY

CMP: Rs38                                        Target Price: Rs60

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n     IVRCL’s Q1FY12 APAT at Rs81 mn (-65% yoy) marginally above est. Execution continues to remains sluggish – revenues -0.4% yoy to Rs 10.46bn, below estimates 

n     EBITDA at Rs0.94bn (+32.8%yoy) v/s est. Rs0.81bn -margins expanded 224 bps yoy to 9%, cost pressures seems to have stabilized for the first time in last 5 quarters

n     IVRCL is looking to remerge IVRCL A&H with IVRCL infra. Asset sale on fast track – IVRCL has already identified two BOT’s and Noida land parcel for divestment

n     Probable easing of liquidity crunch due to divestment of non core assets is improving outlook. Improved margins leading to 5% FY13E EPS - Maintain BUY with a Target Price of Rs60