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IVRCL reported a mixed set of numbers for 2QFY2012, with in-line performance
on the revenue front; however, better-than-expected performance at EBITDAM
level and lower tax rate led to higher-than-expected earnings. Order inflow for
1HFY2012 was commendable at `8,000cr (including L1 projects), given the
current scenario. The company’s order book stands at `25,500cr (4.5x FY2011
revenue, including L1 projects of `5,600cr). During the concall, management
cited that the company is in the advanced stage of selling its Noida land parcel
(book value ~`415cr) and is expecting to close the deal in the next couple of
quarters. We are tweaking our revenue estimates downwards for FY2012 to factor
in the poor performance in 1HFY2012. We maintain our Buy view on the stock.
Better-than-expected results; Positive news flow awaited: IVRCL reported a 2.7%
yoy decline in its top line to `1,046.1cr (`1,075.0cr), in-line with our estimate of
`1,075.0cr. On the EBITDAM front, the company posted flat margin of 9.0%
(8.9%) on a yoy basis, against our estimate of 8.0%. Interest cost came in at
`65.2cr (`48.0cr), a jump of 35.8% yoy/3.9% qoq and was in-line with our
estimate. IVRCL reported a 65.0% yoy decline in its earnings to `8.1cr (`23.3cr),
against our estimate of a 95.3% decline due to better-than-expected EBITDAM
and lower tax outflow.
Outlook and valuation: Management has chalked a plan to reduce the
company’s debt levels by the end of FY2012. In-line with this, IVRCL is looking to
amalgamate its BOT assets back to IVRCL Ltd. and sell its stake in operational
road BOT projects. Also, management is in the advanced stage of monetizing
land parcels. We believe reduction in IVRCL’s debt levels would lend a strong
impetus to its standalone earnings growth and, thereby, act as a catalyst for stock
price movement. We maintain our Buy recommendation on the stock with an
SOTP target price of `59.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IVRCL reported a mixed set of numbers for 2QFY2012, with in-line performance
on the revenue front; however, better-than-expected performance at EBITDAM
level and lower tax rate led to higher-than-expected earnings. Order inflow for
1HFY2012 was commendable at `8,000cr (including L1 projects), given the
current scenario. The company’s order book stands at `25,500cr (4.5x FY2011
revenue, including L1 projects of `5,600cr). During the concall, management
cited that the company is in the advanced stage of selling its Noida land parcel
(book value ~`415cr) and is expecting to close the deal in the next couple of
quarters. We are tweaking our revenue estimates downwards for FY2012 to factor
in the poor performance in 1HFY2012. We maintain our Buy view on the stock.
Better-than-expected results; Positive news flow awaited: IVRCL reported a 2.7%
yoy decline in its top line to `1,046.1cr (`1,075.0cr), in-line with our estimate of
`1,075.0cr. On the EBITDAM front, the company posted flat margin of 9.0%
(8.9%) on a yoy basis, against our estimate of 8.0%. Interest cost came in at
`65.2cr (`48.0cr), a jump of 35.8% yoy/3.9% qoq and was in-line with our
estimate. IVRCL reported a 65.0% yoy decline in its earnings to `8.1cr (`23.3cr),
against our estimate of a 95.3% decline due to better-than-expected EBITDAM
and lower tax outflow.
Outlook and valuation: Management has chalked a plan to reduce the
company’s debt levels by the end of FY2012. In-line with this, IVRCL is looking to
amalgamate its BOT assets back to IVRCL Ltd. and sell its stake in operational
road BOT projects. Also, management is in the advanced stage of monetizing
land parcels. We believe reduction in IVRCL’s debt levels would lend a strong
impetus to its standalone earnings growth and, thereby, act as a catalyst for stock
price movement. We maintain our Buy recommendation on the stock with an
SOTP target price of `59.
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