Brokers’ Call: UBS retains Buy on Reliance Infrastructure

UBS has maintained its ‘Buy’ rating on Reliance Infrastructure with a target price of Rs 650. In Q4 FY13, Reliance Infrastructure (RELI) reported consolidated operating income of Rs61.9bn, EBITDA of Rs8.5bn with an EBITDA margin of 13.7%, and reported PAT of Rs 7.3 billion (up 76% yoy).

It said the results were primarily led by good performance in the infrastructure business segment, which posted good revenue growth and positive EBIT. EPC business margins also increased yoy to 13.6% for the company.

The results indicate that infrastructure business is stabilising, a positive development for Reliance Infra.In Q4 FY13, reported standalone operating income was Rs 39.2 billion, EBITDA Rs 5.1billion, and reported PAT Rs 6 billion (9% decline yoy).

Adding that there is a significant decline in EPC business revenues due to a slowdown in project activities, which it thinks is an outcome of challenges in the broad macro environment.