IL&FS Transportation Networks - Financial Results Update - Microsec

IL&FS Transportation Networks Ltd (ITNL) announced its Q1 FY13 results on 6 th November 2012.

ITNL has posted consolidated net profit of INR 115.94 Crore for the second quarter ended September 30, 2012 as compared to Rs 116.22 Crore for the year ago quarter, representing a decrease of 0.24%.Total income has increased from INR 1255.53 Crore for the quarter ended September 30, 2011 to INR 1370.41 Crore for the quarter ended September 30, 2012, representing an increase of 9.15%.

EBITDA Margin of the company increased from 28.41% to 33.03%, registering an improvement of 4.62%. **EBITDA margin improved to 33%, aided by a strong toll collection from operational assets; toll collection on projects grew 2%-34% YoY. IL&FS Transportation's (ITNL) Q2FY13 profits were broadly in line with our expectations.

ITNL has a robust order book of INR 14,000cr (or 2.5x FY2012 revenues), which provides high revenue visibility over the next few years with an average execution period of 30 months. Aided by a strong balance sheet, ITNL is one of the best asset plays due to peaking interest rates scenario. Declining competition for road BOT projects due to tight liquidity conditions is likely to benefit financially sound companies like ITNL which can win USD1bn worth of new projects every year without any equity dilution.

Therefore, at the current market price, we recommend a "BUY" with the target price of Rs 217.

Source : Equity Bulls

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