KRChoksey is bullish on ILandFS Transportation Networks and has recommended accumulate rating on the stock with a target of Rs 193 in its August 10, 2012 research report.
“ILFT reported Q1FY13 consol PAT of Rs 121.7 crore (+5.3%, YoY), mostly in line estimates (Rs 126 crore), primarily led by high fee income (Rs 192 crore) from newly won projects. Consol revenue grew to Rs 1,580 crore (+44.5%, YoY), primarily led by construction & fee income Rs 1,072 crore (+42.4%, YoY), Elsamex Rs 206 crore (+27.3%, YoY) and Toll income Rs 205 crore (+196%, YoY). EBITDA however grew to Rs 466 crore (+40.8%, YoY) and margins (29.5%) are flat due to high portion of Fee income and Toll revenue. However, standalone construction margins are 8.7% (+60 bps, YoY). Interest costs increased to Rs 252 crore (+77%, YoY) and total debt reached to Rs 115 bn (cosol D/E- 4.0x) led by withdrawn of more debt for ongoing projects. ILFT needs Rs 10 bn incremental equity for existing projects and already have invested Rs 28 bn,”
“ILFT consists of order backlog of Rs 107.5 bn shows the revenue visibility for next two years. The company received the order inflow of Rs 25 bn led by three new projects in Q1FY13. Substantial revenue is contributed by Chenani-Nashri Tunnel in J&K state. ILFT’s substantial profitability is added by higher portion of fee income is a cause of concern. It is difficult to sustain this fee income in longer term therefore we expect ILFT’s margins (~30%) won’t be able to sustain in future. Considering the above factors we reduce our TP to RS 193 (from Rs 203) and recommend “Accumulate” on ITNL,”
“ILFT’s substantial profitability is added by higher portion of fee income is a cause of concern. It is difficult to sustain this fee income in longer term therefore we expect ILFT’s margins (~30%) won’t be able to sustain in future. Considering the above factors we reduce our TP to RS 193 (from Rs 203) and recommend “Accumulate” on ITNL,” says KRChoksey research report. Bodies Corporate holding more than 50% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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
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