Buy IDFC; target of Rs 159: Firstcall Research

Firstcall Research is bullish on IDFC and has recommended buy rating on the stock with a target of Rs 159 in its August 17, 2012 research report.

“IDFC Limited is India's leading integrated infrastructure finance player providing end to end infrastructure financing and project implementation services. The company built on our vision to be the 'one firm' that looks after the diverse needs of infrastructure development in the financial intermediation for infrastructure projects and services, adding value through innovative products to the infrastructure value chain or asset maintenance of existing infrastructure projects, we focus on supporting companies to get the best return on investments. The growth has driven by the substantial investment requirements of the infrastructure sector in India combined with the growth in the Indian economy."

"IDFC Ltd ability to tap global as well as Indian financial resources makes us the acknowledged experts in infrastructure finance. A strong synergy between the company management and key shareholders, and a dedicated team of over 550 people makes us an organization that is committed to improving the face of India's infrastructure sector. At IDFC, our commitment to building India's infrastructure goes beyond business. We work closely with government entities and regulators to advise and assist them in formulating policy and regulatory frameworks that support private investment and public-private partnerships in infrastructure development.”

“IDFC Ltd is India's leading integrated infrastructure finance player providing end to end infrastructure financing and project implementation services, reported its financial results for the quarter ended 30 June, 2012. The first quarter witness a healthy increase in overall sales as well as profitability. The company’s net profit jumps to Rs.3870.84 million against Rs.3297.71 million in the corresponding quarter ending of previous year, an increase of 17.38%. Revenue for the quarter rose 21.99% to Rs.15822.31 million from Rs.12970.05 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.2.64 a share during the quarter, registering 17.32% increase over previous year period. Profit before interest, depreciation and tax is Rs.14220.79 millions as against Rs.12195.43 millions in the corresponding period of the previous year.”

“At the current market price of Rs.140.65, the stock P/E ratio is at 9.85 x FY13E and 8.11 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.14.27 and Rs.17.33 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 23% and 27% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 3.15 x for FY13E and 2.74 x for FY14E. Price to Book Value of the stock is expected to be at 1.49 x and 1.26 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 159 for medium to long term investment,” says Firstcall Research report. 

Public holding more than 90% in Indian cos

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