Maintain 'buy' on Reliance Infrastructure - TP Rs.723 - Geojit BNP Paribas Financial Services

- Current price is in the range of Rs. 529.

- The company reported worse than expected results for 3QFY13.

- There was a one-time gain of Rs.380 crore from the sale of Reliance Power shares.

- Excluding this gain, the company reported PAT of Rs.350 crore, which is 21% lower than analysts' expectations.

- The miss was primarily due to Minimum Alternate Tax (MAT) adjustments, which increased tax expenses.

- The results were operationally in line with analysts' expectations, it seems that the major drivers of the stock performance have been the group activities.

- The company recently reduced its stake in Reliance Power to 35% from 38% and recorded a one - time gain.

- It is expected that the acceptance of a new tariff proposal by regulators in Mumbai is likely to be the next big catalyst fundamentally.

- Maintain 'buy' rating on the stock with a target price of Rs.723. Risks to the target price and rating are adverse outcome from its group companies, lower than expected EPC revenue / margins, delays in recovery of regulated assets in its electrical energy business and delays in project starts.

Source : Equity Bulls

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