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Research
IVRCL Infrastructure - 4QFY2012 Result Update - Angel Broking
Posted On : 2012-05-17 11:22:36( TIMEZONE : IST )
IVRCL Infrastructure (IVRCL) reported disappointing numbers for 4QFY2012, with lower-than-expected performance on all fronts. Order inflow for FY2012 was, however, commendable at ~Rs.10,500cr, given the current scenario. The company's order book stands at ~Rs.28,000cr (5.6x FY2012 revenue, including L1 projects of Rs.5,400cr). IVRCL Assets and Holdings has sold its Noida land (3 parcels out of 4) and has received cash worth ~ Rs.200cr for the same. Further, the company expects to sell the remaining parcel of land for ~Rs.100cr. This development is positive for the company as it will help to fulfill its equity commitment (~Rs.520cr) towards under construction road BOT projects in FY2013.
Poor show on the numbers front: For 4QFY2012, IVRCL's revenue declined by 22.1% yoy to Rs.1,598cr, below our estimate of Rs.1,682cr. As per management, 3-4 projects not contributing to the revenue led to shortfall of Rs.500cr-700cr. During the quarter, the company posted dismal EBITDA margin of 6.4%, registering a dip of 230bp yoy, below our estimate of 8.0% margin. There was debtor provisioning of Rs.50cr during the quarter, which pulled down the company's margin. Interest cost for the quarter stood at Rs.66.1cr, which was flat on a yoy as well as qoq basis. On the earnings front, IVRCL reported a 92.3% yoy decline to Rs.5cr, against our estimate of a 56.6% decline. This was on account of poor performance on the revenue as well as margin front.
Outlook and valuation: We are revising our estimates downwards for FY2013 and FY2014 to factor in the company's poor quarterly performance and as management is not confident of registering 15-20% revenue growth for FY2013, given the headwinds faced by the company. IVRCL has a strong order book of ~Rs.28,000cr (5.6x FY2012 revenue), which provides revenue visibility; however, the company would need to focus on its execution pace going ahead, which has not kept pace with order book growth. We maintain our Buy recommendation on the stock with a revised target price of Rs.61 (Rs.79).
