IL&FS Transportation - In line quarter, earning trajectory uncertain - Emkay

- 3Q13 consol EBITDA at Rs 4.5bn (+40%yoy) beat est Rs 4.1bn driven by strong 37% E&C rev growth. Though PAT came in line (Rs1bn) growth (19%) dragged by high interest (53% yoy)

- Strong execution drives 68% yoy standalone revenue growth, but 37% decline in high margin fee income & 47% increase in interest cost drag net profit growth to just 6%

- Significant slow down in NHAI awarding activity, only 1000 km awarded till date (Annual target ~9K kms). Recent termination of road project to impact NHAI funding plans

- ITNL earning highly leverage to new order inflows. Cut our inflow assumption leading to 1.3%/4.7% earnings downgrade. 20% uptick in stock leave little upside Downgrade to HOLD

Source : Equity Bulls

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