ICICIdirect maintains cautious stance for infra space
ICICIdirect.com has come out with its report on infrastructure sector. The research firm do not expect any significant re-rating for the sector in the near term and maintained its cautious stance for the sector despite attractive valuation, in its research report dated July 11, 2013.
July 11, 2013 / 14:46 IST
ICICIdirect.com's report on infrastructure sector
"In the last few months, we have seen the government's intent towards the reform process such as laying down a mechanism for complete exit for road projects, de-linking forest and environment clearance and allowing of fuel pass through for new power projects in case I bidding in order to prop up the infrastructure sector. While we have seen some progress, we anticipate restricted progress, going ahead, given the scheduled election in the next year (code of conduct applies six month before the election) leaving limited time for the current government. Hence, we do not expect any significant re-rating for the sector in the near term and maintain our cautious stance for the sector despite attractive valuation (Construction: 0.2x-0.6x FY14E P/BV & Infrastructure: 0.4-1.5x FY14E P/BV).""We remain wary over the further progress of the reform process given the scheduled General Election in the next year (code of conduct applies six months before the election) leaving limited time for the current government. Hence, we do not expect any significant re-rating for the sector in the near term and maintain our cautious stance for the sector despite attractive valuation (Construction: 0.2-0.6x FY14E P/BV and infrastructure: 0.4-1.5x FY14E P/BV)," says ICICIdirect.com research report.
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