IVRCL Infrastructures: Results first take—Operating performance exceeds expectations
Maintain estimates, target price of Rs570/share and BUY rating We maintain our earnings estimates. Given the strong order backlog and a typical skew of higher execution in the fourth quarter of the year, we expect IVRCL to exceed our full year revenue and margin estimates. We maintain our SOTP-based target price of Rs570 comprised of (a) core business valuation of Rs365/share, (b) IVR Prime’s contribution of Rs160/share, (c) incremental value from infrastructure projects worth Rs24/share and (d) Rs15/share contribution from Hindustan Dorr Oliver. We rate IVRCL Infrastructure as BUY based on (a) strong likely earnings growth led by execution as well as margin expansion, and (b) strong outlook for infrastructure and industrial
investments.
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