Buy IVRCL; target of Rs 60: Unicon Investment

32975 Investors following IVRCL. Share this News with them.

0

Like this story, share it with millions of investors on M3

Buy IVRCL; target of Rs 60: Unicon Investment

Unicon Investment is bullish on IVRCL and has recommended buy rating on the stock with a target of Rs 60 in its August 16, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy L&T; target of Rs 2127: Motilal Oswal Buy M&M; target of Rs 806: Motilal Oswal Buy PVR; target of Rs 144: ICICIdirect.com ALSO READ See previous views by Unicon Investment See what other Experts & Brokerages are saying about IVRCL See messages about IVRCL IVRCL BSE | NSE 31/05/12 Are Mutual Funds betting on IVRCL?

Unicon Investment is bullish on IVRCL and has recommended buy rating on the stock with a target of Rs 60 in its August 16, 2011 research report.

"IVRCL Ltd. (IVRCL) Q1FY12 top-line came in line with Unicon estimates. However on margin front, result came significantly below our estimates due to lower sales and higher costs. Income from operations at INR 11.2bn remained flat YoY (+1.4%). Operating profit at INR 832Mn was less than our estimate and down 17% YoY. The operating profit margin declined by 167bps to 7.4% compared to 9.1% during same period last year. Lower operating profit was due to lower sales (though factored in by us but below consensus estimates) and higher operating expenditure. Interest out go at INR 628Mn was higher by 38.6% YoY due to rise in working capital cycle and higher loans and advances to its subsidiaries. The extended working capital cycle was due to delay in project execution and higher funding cost. Net profit after tax at INR 41Mn declined by 85% YoY due to lower operating profit, higher depreciation (+45% YoY) and higher interest out go."

"The current order-book (OB) of the company stands at INR 195bn which is around 3.5x its FY11 revenue. Of the total order-book, ~40% faces execution problems owing to several reasons. Current order-book is down by 4% YoY and 10% on sequential basis. Key projects that are witnessing slow executions are a) Goa-Karnataka Road project b) Sion-Panvel Road project c) AP Irrigation works, d) Koyna Hydro projects and other small contracts in the Middle east due to regional issues."

"At the current market price, stock trades at 5.3x its consolidated EPS of 7.4 for FY13e. On the backdrop of higher working capital cycle, higher input costs and uncertainty as to timely projects execution (40% of OB slow moving), we lower our price target to INR 60 (8x its FY13e) . Buy," says Unicon Investment research report.

Public holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment