IVRCL may move to Rs 62- 64: SP Tulsian

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IVRCL may move to Rs 62- 64: SP Tulsian

IVRCL may move to Rs 62- 64, says SP Tulsian, sptulsian.com.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about IVRCL See messages about IVRCL

IVRCL may move to Rs 62- 64, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "IVRCL and IVRCL Assets , both the stocks probably have moved close to about 80-100% in this last one month or maybe 45 days. One can understand because IVRCL Assets is getting merged with IVRCL Limited on a swap ratio of five shares of IVRCL for every six shares held in IVRCL Assets."

He further added, "One can coolly take a call on IVRCL. The kind of view which I have been maintaining for last one month, firstly that the stock or the stake held to the extent of 75% by IVRCL in IVRCL Assets is getting extinguished so that is keeping the equity of the merged entity quite low. (2) They are going for demerger of realty assets as well as of the PPP projects. That indicates that company will be aggressive in selling those assets and demonetizing or de-leveraging the balance sheet of the company by monetizing those assets. So that will substantially bring down the debt which is now to the extent of about Rs 2200-2500 crore."

"So taking these two into consideration if you see the standalone result of IVRCL, I don't see any problem in terms of the order book they have - Rs 14,000-15,000 crore, in terms of the topline, in terms of the execution capability, in terms of even their PAT margin which is at about 6-7%. So extending that point further inspite of we have seen a huge run up of about 80% plus, I am maintaining my positive view on IVRCL Limited. In fact it will be a good strategy, those who are having a one year horizon can look to go to IVRCL Assets and look to acquire the shares via that route because effectively that gives you an arbitrage opportunity of about 8-10% even at the present price. So I continue to have my positive view. At least the stock looks that it can move to Rs 62 to Rs 64 maybe in next one month or so and there again it should take some pause and should settle for some time."