Buy Reliance Infra; target of Rs 830: KRChoksey

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Buy Reliance Infra; target of Rs 830: KRChoksey

KRChoksey is bullish on Reliance Infra and has recommended buy rating on the stock with a target of Rs 830 in its February 16, 2012 research report.

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RELATED NEWS Buy eClerx Services; target of Rs 815: Firstcall Research Buy Wockhardt; target of Rs 548: Networth Stock Broking Sell Engineers India; target of Rs 249: Dolat Capital ALSO READ See previous views by KRChoksey See what other Experts & Brokerages are saying about Reliance Infra See messages about Reliance Infra Reliance Infra BSE | NSE 31/05/12 Are Mutual Funds betting on Reliance Infra?

KRChoksey is bullish on Reliance Infra and has recommended buy rating on the stock with a target of Rs 830 in its February 16, 2012 research report.

"Reliance Infra reported consol. revenue of Rs 6,130 crore (+41%) as compare to our estimates of Rs 4,356 crore, primarily driven by electrical segment (+12% vs. expt) and EPC segment (+96% vs. expt). Infra BOT assets revenue is inline to our estimates. EBITDAM fell by 193 bps (YoY) on account of higher subcontract costs, however electrical segment margins has improved by 680 bps (QoQ) in Q3FY12. Reported PAT is Rs 408.3 (+1%, YoY), primarily impacted by higher interest and tax cost."

"EPC revenue, Rs 2,939 crore (+96% vs. expt), drive the operational performance in Q3FY12 on account of better execution in Rpower projects. The order backlog of Rs 21,155 crore improves the visibility for next 2.5 years. The order backlog is divided into verticals like power (9,900 MW), transmission (1,500 km) and road (570 km). Energy business reported improvement of 680 bps margins primarily fall in energy purchased cost (-17% YoY), increase in wheeling income (Rs 59 crore, +90% YoY) and levying of cross subsidy charge (Rs 29 crore). The company sold 1,599 mn (-11.2 YoY) units in Mumbai & 3,358 mn (+8.4 YoY) units in Delhi. BOT assets reported Rs 85 crore (+96% YoY), further addition of Mumbai metro into BOT portfolio will add value for the company."

"We revised our estimates of consol. EPS to Rs 68.0 & 76.0 (from Rs 67.5 & Rs 84.1) for FY12E & FY13E respectively based on increase in EPC revenue and debt on consolidated basis. Further, we have increased our TP to Rs 830 (from Rs 635) based on incorporation of higher EPC revenue & change in CoE from 14% to 13% for infra BOT & distribution assets. We recommend "Buy" on RInfra with a TP of Rs 830," says KRChoksey research report. 

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