Buy ILandFS Transportation; target Rs 219: KRChoksey

KRChoksey is bullish on ILandFS Transportation Networks and has recommended buy rating on the stock with a target of Rs 219 in its May 14, 2013 research report.

“ILFT reported Q4FY13 consol PAT of Rs 178.4 crore (+0.6 percent, YoY), which is below to estimates (Rs 196 crore), primarily led by fall in construction revenue & low fee income contributed by the newly won project in the last quarter.  Consol revenue decreased to Rs 1,930 crore (-2.9 percent, YoY), primarily led by construction income Rs 1,387 crore (-3.6 percent, YoY), Elsamex Rs 327.6 crore (+22.9 percent, YoY) and Toll income Rs 230 crore (+26.6 percent, YoY). EBITDA however grew to Rs 471.7 crore (+3.2 percent, YoY) and margins (24.4 percent) have improved by 144 bps due to fall in construction cost by 656 bps on YoY. However, standalone construction margins are 10.9 percent (+153 bps, YoY).  Interest costs increased to Rs 302.2 crore (+30.9 percent, YoY) and total debt reached to Rs 143.5 bn (cosol D/E- 3.95x) led by withdrawn of more debt for ongoing projects. ILFT needs Rs 24.1 bn incremental equity for existing projects and already have invested Rs 32.6 bn.”
 
“ILFT consists of order backlog of Rs 147 bn shows the revenue visibility for next three years. Management is confident to achieve the order inflow matching with previous year as NHAI’s awarding activities will catch pace in H2FY14E. The company received the order inflow of Rs 39 bn due to addition of khed-sinner & barwa-add two new BOT Toll road projects. Substantial revenue is contributed by Pune-Sholapur road project.” “ILFT’s substantial standalone profitability is added by higher portion of fee income, we believe it is big challenge for ILFT to maintain Fee Income in long term. However, considering the opportunity and positioning of ILFT in the road sector, we have derived SOTP TP to Rs 219 based and recommend “Buy” on ITNL,” says KRChoksey research report. 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.

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