Buy Reliance Infrastructure; target of Rs 676: Firstcall

Firstcall Research report on Reliance Infrastructure

"Reliance Infra has reported a Total Income of Rs. 44870.8 mn (US$ 727 mn) in Q2 FY15 against Rs. 52734.0 mn in the previous quarter. During Q2 FY15, Net Profit was Rs. 4311.9 mn (US$ 70 mn) against Rs. 4266.0 mn in the previous quarter, inspite of Mumbai Metro incurring a loss of Rs. 570 mn during the quarter. As on September 30, 2014, the consolidated Networth of the Company stood at Rs. 280400 mn and is conservatively financed with debt to equity of 0.91x. The Company has generated 1,091 million units in Q2 FY15 at Dahanu Thermal Power Station. In Q2 FY15, revenue from Electricity business was Rs. 326774.9 mn. Recovered Rs. 2210 mn arrears in Q2FY15; Recovered Rs. 9660 mn arrears in last 12 months. During Q2 FY15, recovered Rs. 560 mn Cross Subsidy Surcharge and 77500 new consumers added in Mumbai and Delhi discom. RInfra's EPC business revenue was Rs. 5770 mn & Order Book of Rs. 61060 mn as on September 30, 2014. Infrastructure segment has earned revenue of Rs. 2151.7 mn in Q2 FY15 against Rs. 1730.9 mn in Q2 FY14, an increase 24%. 10 out of 11 road projects are now generating revenue of the company. Reliance cement commercially launched in 6 states with 5.8 mtpa operational Capacity. RInfra has a capability to show sustainable cashflow from regulated electrical and strong growth potential infra businesses. Hence, we recommend ‘BUY' for ‘Reliance Infrastructure Ltd' with a target price of Rs 676 for medium to long term investment", says Firstcall Research Report.

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