Accumulate ILandFS Trans; target of Rs 222: Emkay

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Accumulate ILandFS Trans; target of Rs 222: Emkay

Emkay Global Financial Services is bullish on ILandFS Transportation Networks and has recommended accumulate rating on the stock with a target of Rs 222 in its February 08, 2012 research report.

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Emkay Global Financial Services is bullish on ILandFS Transportation Networks and has recommended accumulate rating on the stock with a target of Rs 222 in its February 08, 2012 research report.

"ITNL reported APAT which was down 30.4% yoy to Rs 437mn v/s Rs 240mn led by higher than expected fee income. EBITDA down 15% yoy at Rs 1.05bn v/s Rs 0.74bn. Standalone construction margin came in at 8.6% v/s 13% far lower than our expectation, however the higher than expected fee booking in the quarter led to the overall beat. ITNL recognized Rs 540 mn on Jharkhand project as one time milestone payment & also a bid advisory fee of Rs 400 mn for providing consultancy to a group company. The one off fee income led to the overall beat in Q3 performance. Revenue was up 125% at Rs 5.66bn v/s exp Rs 5.72bn led by higher than expected fee income. ITNL reported fee income of Rs 1.47bn v/s expectation of Rs 0.55bn which drove the entire outperformance."

"ITNL reported APAT of Rs 0.878bn v/s Rs 0.666bn yoy up 42.5% yoy & EBITDA at Rs 3.21bn v/s Rs 2.73bn up 47.1% yoy led by construction which grew 125% yoy to Rs 9.05bn v/s exp of Rs 9bn. Revenues from toll/annuity witness smart growth of 69% yoy to Rs 1485mn Revenues from Elsamax fell 32% sequentially to Rs 1.83bn which arrested the overall revenue growth revenues to 42% from Rs 8.8 bn to Rs 12.55bn. ITNL has been execution projects at a rampant pace led by the global ambition has resulted significant growth leverage at ITNL. ITNL has a gross debt expanded to Rs 93.8bn in Dec-11 with a consolidated Debt:Equity of 3.49x v/s 2.68x in Q2."

"ITNL has won a project Kiratpur Ner chowk in Jan 12 after a dry patch of over an year. Competitive intensity which was significantly high in CY11 seems to have cooled off significantly with numbers of players in the bidding fray reducing significantly. ITNL is amongst the prime beneficiary and has the highest sensitivity to the interest rate movement in our portfolio. With signs of interest rate reversal getting more and more imminent, even after an out performance to NIFTY over the last month, we still believe IL&FS transportation has further room for appreciation from the present level. We maintain accumulate with a target price of Rs 222," says Emkay Global Financial Services research report.    

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