Accumulate IVRCL Infra, target Rs 399: Angel Broking

Angel Broking has recommended an accumulate rating on IVRCL Infrastructure with a price target of Rs 399 in its report dated June 10, 2009.

“We have used SOTP methodology to value the company owing to its diversified portfolio. Our SOTP-based target price for IVRCL works out to Rs 399, wherein we have assigned P/E of 14x FY2011E EPS of Rs 24.1 for its core Construction business, which translates into Rs 338 per share. Its majority stake in HDO and IVR Prime has been valued at current market levels giving a 20% holding company discount. These two combined stakes contribute Rs 32 per share to our target price.”

“We have valued the BOT projects at 1.5x P/BV (which would get operational by September 2009) and they together contribute Rs 29 per share to our target price. Further, with the Congress back in power in Andhra Pradesh (AP) it would provide a near-to-medium-term catalyst for the stock. However, post elections IVRCL has run up 127.1% outperforming the BSE Sensex by 100.0%. Therefore, we are recommending an ‘accumulate’ rating on the stock since upside from the current levels to our SOTP target price of Rs 399 is limited,” says Angel Broking’s report.

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