Buy IVRCL; target of Rs 51: Angel Broking

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26 Aug, 2025 12:21

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Angel Broking is bullish on IVRCL and has recommended buy rating on the stock with a target of Rs 51 in its August 31, 2012 research report.

“IVRCL Infrastructure (IVRCL) reported disappointing numbers for 1QFY2013, with lower-than-expected performance. The order inflow for 1QFY2013 was at Rs3900cr, out of which Rs2800cr was contributed by road build operate transfer (BOT) projects and the balance by engineering, procurement and construction (EPC) contracts. The company’s order book stands at Rs27100cr (4.9x FY2013E revenue, including L1 projects of Rs2000cr). IVRCL has merged IVRCAH with itself during the quarter. The company has sold its stake in one of its road BOT projects and has recognized an amount of Rs117cr. Further, IVRCL is in an advanced stage of negotiation for sale of another two to three road BOT projects. As per the management, these asset sales are intended towards meeting the equity requirement for the road BOT projects and reducing debt levels. “

“For 1QFY2013, IVRCL’s revenue grew by 7.4% yoy to Rs1207cr and was marginally below our estimate of Rs1258cr. On the operating margins front, the company posted margins of 10.3%, an improvement of 270bps on a y-o-y basis, ie above our estimates of 7.7%. The interest cost came at Rs138cr, a jump of 67.0% and 41.4% on a y-o-y and q-o-q basis respectively. On the earnings front, IVRCL reported a loss of Rs6cr against a profit of Rs4cr in 1QFY2012 and our estimate of Rs3cr owing to higher interest cost.”

“IVRCL has an equity requirement of Rs2,700cr out of which Rs700cr has already been invested. The remaining Rs2,000cr would be partly funded by the company through internal accruals and sale of BOT assets/land parcels. This is expected to raise Rs1,100cr while the remaining Rs900cr would be funded by Compulsory Convertible Debentures. IVRCL has a strong order book of Rs27100cr (4.9x FY2013E revenue), which provides revenue visibility; however, the company would need to focus on its execution pace going ahead, which has not kept pace with order book growth. We maintain our buy recommendation on the stock with a target price of Rs51,” says Angel Broking research report.

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