Accumulate IVRCL with target of Rs 399: Angel Broking
Angel Broking has recommended 'accumulate' for IVRCL Infra, one of the leading construction players with irrigation as its forte, setting a target of Rs 399 from its current market price Rs 369.
By ET Bureau |
MUMBAI: Angel Broking has recommended ���accumulate��� for IVRCL Infra, one of the leading construction players with irrigation as its forte, setting a target of Rs 399 from its current market price Rs 369.
According to the broking house research report, it has a strong business model in place to tap the potential US $500billon of infrastructure investments in India over the Eleventh 5-year Plan.
The brokerage has assigned IVRCL's core construction business a P/E of 14x FY2011E EPS of Rs 24.1, while its majority stake in HDO and IVR Prime has been valued at a 20% discount to the current price. It has valued IVRCL's BOT projects at 1.5x P/BV.
Further, with the Congress back in power in Andhra Pradesh (AP) it would provide a near-to-medium-term catalyst for the stock. However, post elections IVRCL has run up 127.1% outperforming the BSE Sensex by 100.0%.
As far as company balance sheet is concerned, IVRCL is better placed compared to its peers on the leverage front with a debt/equity ratio of a mere 0.8x (FY2009E basis). Even after considering its exposure to BOT projects, IVRCL's leverage is hovering at just about 1.5x.
This is mainly on account of the management's foresight not to over leverage its balance sheet by not bidding for road BOT projects. IVRCL was also able to raise money for its real estate subsidiary, IVR Prime, through an IPO which helped it maintain a healthy balance sheet, says a report by Angel Broking.
According to the broking house research report, it has a strong business model in place to tap the potential US $500billon of infrastructure investments in India over the Eleventh 5-year Plan.
The brokerage has assigned IVRCL's core construction business a P/E of 14x FY2011E EPS of Rs 24.1, while its majority stake in HDO and IVR Prime has been valued at a 20% discount to the current price. It has valued IVRCL's BOT projects at 1.5x P/BV.
Further, with the Congress back in power in Andhra Pradesh (AP) it would provide a near-to-medium-term catalyst for the stock. However, post elections IVRCL has run up 127.1% outperforming the BSE Sensex by 100.0%.
As far as company balance sheet is concerned, IVRCL is better placed compared to its peers on the leverage front with a debt/equity ratio of a mere 0.8x (FY2009E basis). Even after considering its exposure to BOT projects, IVRCL's leverage is hovering at just about 1.5x.
This is mainly on account of the management's foresight not to over leverage its balance sheet by not bidding for road BOT projects. IVRCL was also able to raise money for its real estate subsidiary, IVR Prime, through an IPO which helped it maintain a healthy balance sheet, says a report by Angel Broking.
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