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IVRCL Infrastructure's (IVRCL) 3QFY12 performance was significantly below expectations with revenue declining
15.2% YoY to INR12b, lower than our estimate of INR14.4b. Revenue growth was impacted by lack of clearances,
slow decision-making and unseasonal rains.
The company reported EBITDA of INR948m (down 32.5% YoY) v/s our estimate of INR1.3b. EBITDA margin was
7.9% (down 200bp YoY) v/s our estimate of 9%. Margin was impacted by lower fixed-cost absorption. PAT
plunged 84% YoY to INR68m compared to our estimate of INR132m.
Interest cost stood in 3QFY12 increased 11% YoY to INR661m from INR592m in 3QFY11, and INR652m in 2QFY12.
Interest cost was significantly below our estimate of INR840m. Depreciation increased 15% YoY to INR229m.
Debt as at end-3QFY12 was INR25b, up from INR21b in 4QFY11, and INR14.5b at end-FY10.
Order book at end-3QFY12 was INR260b (including L1 orders of INR40b). Order intake during the quarter stood
at INR34b (up 68% YoY), contributed by Water & Irrigation projects (22% of total), Buildings (12%), Transport
(29%) and Mining (36%).
9MFY12 order intake is INR65b (down 12% YoY). In Jan-Feb 2012, order intake was INR42b, taking the total for
YTDFY12 to INR107b (v/s INR89b for full year FY11). This includes 4 major orders: (1) INR12b order from
Hindustan Copper for the development of an underground mine of 5mtpa capacity at Balaghat, Madhya
Pradesh, (2) INR14.8m project from Ministry of Road, Transport and Highways, as part of Trans-Arunachal
highway project, (3) INR12b project including 4/6-laning of the Raipur-Bilaspur section of NH-200 in the state
of Chattisgarh; and (4) INR12b road project for 4-laning from Government of Haryana.
We have cut our revenue estimates by 7% for FY12 and by 4% for FY13 to factor in lower-than-expected
revenue traction in 3QFY12 and likely subdued performance in 4QFY12. We have also lowered our EBITDA
margin estimates by 40bp for FY12 and by 10bp for FY13. Our revised EPS estimates are lower by 11% for FY12
and by 2% for FY13. We maintain Buy with an SOTP-based target price of INR71, valuing the core business at
INR39 (6.5x FY13E EV/EBITDA), IVRC Assets at INR27 and HDO at INR5.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IVRCL Infrastructure's (IVRCL) 3QFY12 performance was significantly below expectations with revenue declining
15.2% YoY to INR12b, lower than our estimate of INR14.4b. Revenue growth was impacted by lack of clearances,
slow decision-making and unseasonal rains.
The company reported EBITDA of INR948m (down 32.5% YoY) v/s our estimate of INR1.3b. EBITDA margin was
7.9% (down 200bp YoY) v/s our estimate of 9%. Margin was impacted by lower fixed-cost absorption. PAT
plunged 84% YoY to INR68m compared to our estimate of INR132m.
Interest cost stood in 3QFY12 increased 11% YoY to INR661m from INR592m in 3QFY11, and INR652m in 2QFY12.
Interest cost was significantly below our estimate of INR840m. Depreciation increased 15% YoY to INR229m.
Debt as at end-3QFY12 was INR25b, up from INR21b in 4QFY11, and INR14.5b at end-FY10.
Order book at end-3QFY12 was INR260b (including L1 orders of INR40b). Order intake during the quarter stood
at INR34b (up 68% YoY), contributed by Water & Irrigation projects (22% of total), Buildings (12%), Transport
(29%) and Mining (36%).
9MFY12 order intake is INR65b (down 12% YoY). In Jan-Feb 2012, order intake was INR42b, taking the total for
YTDFY12 to INR107b (v/s INR89b for full year FY11). This includes 4 major orders: (1) INR12b order from
Hindustan Copper for the development of an underground mine of 5mtpa capacity at Balaghat, Madhya
Pradesh, (2) INR14.8m project from Ministry of Road, Transport and Highways, as part of Trans-Arunachal
highway project, (3) INR12b project including 4/6-laning of the Raipur-Bilaspur section of NH-200 in the state
of Chattisgarh; and (4) INR12b road project for 4-laning from Government of Haryana.
We have cut our revenue estimates by 7% for FY12 and by 4% for FY13 to factor in lower-than-expected
revenue traction in 3QFY12 and likely subdued performance in 4QFY12. We have also lowered our EBITDA
margin estimates by 40bp for FY12 and by 10bp for FY13. Our revised EPS estimates are lower by 11% for FY12
and by 2% for FY13. We maintain Buy with an SOTP-based target price of INR71, valuing the core business at
INR39 (6.5x FY13E EV/EBITDA), IVRC Assets at INR27 and HDO at INR5.
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