Macquarie rates IVRCL Infrastructure as 'outperform'
IVRCL is one of the top picks of Macquarie in the construction space. In addition to the Sion-Panvel Highway project, IVR Prime is the lowest bidder for two new road projects-one at the Indore-Gujarat border and between Salem-Coimbatore.
By ET Bureau |
CMP: Rs 365
IVRCL is one of the top picks of Macquarie in the construction space. In addition to the Sion-Panvel Highway project, IVR Prime is the lowest bidder for two new road projects—one at the Indore-Gujarat border and between Salem-Coimbatore.
These two road projects would entail a cost of Rs 1,200 crore each. Of the current portfolio of road projects, the Kumarapalayam-Chengapalli toll road has already been commissioned. Another two—Salem to Kumarapalayam and Jalandhar to Amritsar—are expected to be commissioned by end of December ‘09.
Out of these projects, IVR Prime would be required to put in equity for three new projects to the tune of Rs 1,170 crore. As per the restructuring strategy, IVRCL would receive the construction contract for these projects which would add almost 16% to its current Rs 15,000 crore order book.
Moreover, the company is confident of achieving its guidance of around 30% topline growth and margin expansion of 100-150 bps. IVRCL is trading at 12.2x FY11E earnings adjusted for subsidiary valuations. The increased focus on the core EPC (Engineering, Procurement and Construction) business result in a robust 35% adjusted earnings CAGR over FY09-11E.
IVRCL is one of the top picks of Macquarie in the construction space. In addition to the Sion-Panvel Highway project, IVR Prime is the lowest bidder for two new road projects—one at the Indore-Gujarat border and between Salem-Coimbatore.
These two road projects would entail a cost of Rs 1,200 crore each. Of the current portfolio of road projects, the Kumarapalayam-Chengapalli toll road has already been commissioned. Another two—Salem to Kumarapalayam and Jalandhar to Amritsar—are expected to be commissioned by end of December ‘09.
Out of these projects, IVR Prime would be required to put in equity for three new projects to the tune of Rs 1,170 crore. As per the restructuring strategy, IVRCL would receive the construction contract for these projects which would add almost 16% to its current Rs 15,000 crore order book.
Moreover, the company is confident of achieving its guidance of around 30% topline growth and margin expansion of 100-150 bps. IVRCL is trading at 12.2x FY11E earnings adjusted for subsidiary valuations. The increased focus on the core EPC (Engineering, Procurement and Construction) business result in a robust 35% adjusted earnings CAGR over FY09-11E.
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