Views on IL&FS Transportation Networks 3QFY2014 results - Angel Broking

Views of Mr. Viral Shah (Sr. Research Analyst-Infrastructure, Angel Broking) on IL&FS Transportation Networks 3QFY2014 results:

"For 3QFY2014, IL&FS Transportation Networks (ITNL) reported a good set of numbers which were above our estimates on both - revenue and profitability front. ITNL reported good performance on the top-line front owing to pick up execution in it's under construction projects; while earnings were ahead our estimate mainly due to better-than-expected execution and tax reversal during the quarter. ITNL's consolidated revenue increase by 11.4% yoy to Rs. 1,966cr in 3QFY2014, which was above our estimate of Rs. 1,819cr. EBITDA margins decrease sequentially by 1,242bp to 24.8% (25.5%) in 3QFY2014, against our estimate of 28.0%. This was mainly on account of increase in construction expense (up 6% yoy) and employee cost (up 28% yoy) during the quarter. Interest cost grew by 46.3% yoy to Rs. 416cr in 3QFY2014 and was higher than our estimate by 15.0%. On the earnings front, ITNL reported subdued growth of 5.5% yoy to Rs. 110cr against our estimate of Rs. 105cr mainly on account of better-than-expected revenue performance and tax reversal during the quarter. We continue to maintain Buy rating on the stock however our target price is Under Review."

Source : Equity Bulls

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