IL&FS Transportation Networks Ltd - Bumpy road ahead - Emkay

Reco: HOLD
CMP: Rs 166
Target Price: Rs 182

- Robust order backlog (3X FY13 Cons rev) to help construction CAGR of 25% over FY13-15E, but high margin fee income to stagnate implying muted EBITDA CAGR of 5%

- Standalone leverage to surge higher to 2.2x as ITNL pumps in equity (Rs24 bn) to complete projects. High leverage in absence on meaningful rate cuts to put pressure on standalone profitability

- Nine projects (4 projects to get consolidated) to start toll collection over FY14-15E. However contribution to PAT remain muted due to higher interest

- Dilution eminent in/post FY15E as standalone leverage unsustainable. Stock trades close to our fair value estimate of Rs182. Retain Hold.

Source : Equity Bulls

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