IVRCL INFRA PRICE: RS.342 --- TARGET PRICE: RS.474 :Kotak Securities

IVRCL INFRASTRUCTURES LTD
PRICE: RS.342 Kotak Securities Recommends: BUY
TARGET PRICE: RS.474 FY10E P/E: 13.4X

52 Week High:575.00  Lows: 250.00


Result Highlights
Company posted excellent set of numbers for Q1FY09 with revenues for the
current quarter registering 37% growth YoY, inline with our expectations.

 Operating margins for Q1FY09 stood at 8.8% which is slightly lower than our
estimates. This was due to higher sub contracting charges in the current quarter.
n Company still claims the benefits under Section 80IA, resulting in lower tax paid
as against our expectations.

we expect company's revenues to grow at a CAGR of 31% between FY08-FY10 and profits to grow at a CAGR of 20% between FY08-FY10. At current price of Rs 300, stock is trading at 16.3x and
13.4x its P/E multiples on FY09 and FY10 estimates respectively. Net of BOT
valuations, stock is trading at very attractive valuations of 11.3x and 9.3x its P/E
multiples on FY09 and FY10 estimates respectively. We maintain BUY with a
price target of Rs.474 (Rs.533 earlier)



We believe that company is set
to benefit from increased investments in the infrastructure segment as well as
has a healthy order book which provides revenue visibility for next 2.5 years.

Revenue growth was led by the robust order book of Rs 150bn. Current order
book is diversified across water(Rs 98bn),building(Rs 31bn),power(Rs 10bn) and
transportation(Rs 9bn). Order inflow in the current quarter was also very strong
and was approximately around Rs 29 bn. Current order book of Rs 150bn contains
L1 orders worth Rs 24bn.

Management is quite confident about the future growth in the order inflows.
With a robust order book and expected order inflows, we maintain our revenue
estimates and expect revenues to grow at a CAGR of 31% between FY08-
FY10.

Kotak Securities maintains BUY on the stock.

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