Accumulate IVRCL Infrastructure Ltd - Kotak

Results of the company were lower than our estimates on operating profit and net profit front. Net profit performance was impacted by higher interest and tax outgo. Execution has also not ramped up in line with expectations despite healthy order book.

We believe that revenue growth going forward would be dependent on financial closure as well as execution ramp up from key road projects. Thus, fund raising by the company via stake sale in various projects is very important to meet equity requirements of various road projects. Though some progress is seen in land monetization by the company but delays in raising funds from road projects would keep revenue growth subdued for the company.

We thus remain cautious on the company and continue to maintain ACCUMULATE rating on the stock and would advise investors to look for declines as well as improvement in performance to enter the stock. Any news flow regarding stake purchase by Essel group may turn out to be positive for IVRCL stock.

Source : Equity Bulls

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