Buy GVK Power and Infrastructure - Motilal oswal

GVK Power and Infrastructure (GVKP IN; Mkt Cap USD1b, CMP Rs30, Buy)

GVKPIL reported consol PAT of Rs419m, down 8.4% YoY largely due to poor performance of power division (PAT of Rs66m in v/s Rs127 YoY).

During 3QFY11, the power business reported revenue of Rs3.3b (down 5% YoY), EBITDA of Rs702m (down 19% YoY) and PAT of Rs66m (v/s Rs127 YoY).

Recent AERA ruling specified "Single Till" structure for Bangalore/Hyderabad airport and has indirectly put even the Mumbai/Delhi airport under the lens.

We expect GVKPIL to report consolidated net profit of Rs1.8b in FY11 (up 11%), Rs2.8b in FY12 (up 56%) and Rs4.1b in FY13 (up 47%). The stock trades at a PER of 26.3x FY11E, 16.9x FY12E and 11.5x FY13E. Maintain Buy.

Source : Equity Bulls

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