IVRCL Infrastructure

8/6/2019 IVRCL Infrastructure

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Please refer to important disclosures at the end of this report 1

Y/E March (` cr) 1QFY12 1QFY11 % chg (yoy) 4QFY11 % chg (qoq)

Revenue 1,124 1,106 1.6 2,052 (45.2)

EBITDA 85.6 100.8 (15.1) 178.1 (51.9)

PAT 4.2 28.1 (85.0) 64.3 (93.4)

Source: Company, Angel Research

IVRCL Infrastructure (IVRCL) reported disappointing set of numbers for

1QFY2012, with lower-than-expected performance on all fronts despite our

estimates being the lowest on street. We are revising our estimates downwards

and have reduced our target P/E multiple to 7x from 8x to factor in poor

performance in 1QFY2012, high interest rate scenario and persistent pessimismsurrounding the sector. However, the recent sharp fall in IVRCL’s stock price has

brought the stock at undemanding valuations of 0.5x P/BV on FY2013E

(standalone). Hence, we maintain our Buy view on the stock.

Results disappoint, despite low expectations: IVRCL reported abysmal 1.6% yoy

top-line growth to ` 1,124.3cr ( ` 1,106.4cr), below our and street estimates. On

the operating margin front, the company posted dismal margin of 7.6% (9.1%), a

dip of 150bp yoy, against our estimate of 8.9% owing to commodity price

pressures, high labour charges and ineligibility to pass on escalations in water

projects (primarily in Tamil Nadu region). Further, IVRCL reported a shocking

85.0% yoy decline on the earnings front to ` 4.2cr ( ` 28.1cr), against our estimate

of ` 15.9cr and consensus estimate of ` 22.3cr. This was primarily on account oflow margin and higher interest cost ( ` 62.8cr).

Outlook and valuation: We have valued IVRCL on an SOTP basis. The company’s

core construction business is valued at P/E of 7x FY2013E EPS of ` 6.3

( ` 44.2/share), whereas its stake in subsidiaries IVR Prime ( ` 15.0/share) and

Hindustan Dorr-Oliver ( ` 4.5/share) has been valued on mcap basis, post

assigning a 20% holding company discount. At the CMP of ` 40, the stock is

trading at 6.3x FY2013E EPS and 0.5x FY2013E P/BV on a standalone basis and

adjusting for its subsidiaries at 3.2x FY2013E EPS and 0.2x FY2013E P/BV.

Therefore, on the back of the company’s robust order book-to-sales ratio (2.7x

FY2011 revenue, adjusted for L1 and slow-moving orders) and attractive

valuations, we maintain our Buy view on the stock with a target price of `64.

Key financials (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012E FY2013E

Net sales 5,492 5,651 5,798 6,994

% chg 10.3 2.9 2.6 20.6

Adj. net profit 211.3 158.1 114.4 168.7

% chg (6.5) (25.2) (27.6) 47.5

FDEPS (`) 7.9 5.9 4.3 6.3

EBITDA margin (%) 9.7 9.1 8.8 9.2

P/E (x) 5.0 6.7 9.2 6.3

RoAE (%) 11.5 8.2 5.6 7.9

RoACE (%) 14.2 11.6 10.0 11.4P/BV (x) 0.6 0.5 0.5 0.5

EV/Sales (x) 0.5 0.5 0.5 0.5

EV/EBITDA (x) 4.7 5.8 6.0 5.9


BUYCMP ` 40

Target Price ` 64

Investment Period 12 Months

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 9.5

MF / Banks / Indian Fls 24.8

FII / NRIs / OCBs 49.3

Indian Public / Others 16.5

Abs. (%) 3m 1yr 3yr

Sensex (8.8) (7.3) 14.2

IVRCL (45.7) (75.4) (75.9)

2

16,731

5,036

IVRC.BO

IVRC@IN

1,056

1.7

174 / 39

475,913

Infrastructure

Avg. Daily Volume

Market Cap ( ` cr)

Beta

52 Week High / Low

Face Value ( ` )

BSE Sensex

Nifty

Reuters Code

Shailesh Kanani

022-39357800 Ext: 6829

[email protected]

Nitin Arora

022-39357800 Ext: 6842

[email protected]

IVRCL Infrastructure

Performance Highlights

1QFY2012 Result Update | Infrastructure

August 16, 2011



IVRCL Infrastructure | 1QFY2012 Result Update

August 16, 2011

Exhibit 1: 1QFY2012 performance (Standalone)

Y/E March (` cr) 1QFY12 1QFY11 % chg (yoy) 4QFY11 % chg (qoq) FY2011 FY2010 % chg

Net Sales 1,124.3 1,106.4 1.6 2,052.2 (45.2) 5,651.5 5,492.3 2.9

Total Expenditure 1,038.7 1,005.7 3.3 1,874.1 (44.6) 5,136.9 4,961.0 3.5Operating Profit 85.6 100.8 (15.1) 178.1 (51.9) 514.6 531.3 (3.1)

OPM (%) 7.6 9.1 (150)bp 8.7 (110)bp 9.1 9.7 (60)bp

Interest 62.8 45.3 38.8 65.6 (4.3) 218.2 163.9 33.1

Depreciation 22.8 15.7 44.7 21.7 4.7 75.8 54.3 39.6

Non Operating Income 4.9 0.9 457.9 4.3 12.8 12.0 15.5 (22.8)

Nonrecurring items - - - - - - (140.9) -

Profit Before Tax 4.9 40.6 (88.0) 95.0 (94.9) 232.6 187.7 23.9

Tax 0.7 12.5 (94.7) 30.8 (97.8) 74.7 117.7 (36.5)

Reported PAT 4.2 28.1 (85.0) 64.3 (93.4) 157.9 70.0 125.5

PAT (%) 0.4 2.5 - 3.1 - 2.8 1.3 -

Adjusted PAT 4.2 28.1 (85.0) 64.3 (93.4) 158.1 211.3 (25.1)

Adj. PAT (%) 0.4 2.5(210)bp 3.1 (270)bp 2.8 3.8 (100)bp

Adj. FDEPS 0.2 1.1 (85.0) 2.4 (93.4) 5.9 7.9 (25.1)


Exhibit 2: 1QFY2012 Actual vs. Angel estimates

(` cr) Actual Estimates Variation (%)

Revenue 1,124.3 1,216.8 (7.6)

EBITDA margin (%) 7.6 8.9 (130)bp

PAT 4.2 15.9 (73.5)


Execution growth marred by headwinds

On the top-line front, IVRCL reported abysmal 1.6% growth yoy to ` 1,124.3cr

( ` 1,106.4cr), below our and street estimates. As per management, the current

scenario of high interest rates has resulted in slowdown in execution as

both IVRCL’s suppliers and sub-contractors are facing funding problems. Further,

this situation is likely to prevail for the next couple of quarters, given no evident

slowdown on the inflation front as of recent numbers. Against this backdrop, we

have pruned IVRCL’s revenue to ` 5,798cr ( ` 6,275cr) and ` 6,994cr ( ` 7,494cr) for

FY2012 and FY2013, respectively.

BOT toll revenue and projects update

As per management, three operational BOT projects contributed combined toll

revenue of ~ ` 24lakhs/day. This revenue is ~14% below the initial internal

estimates of IVRCL. Toll hike (linked to WPI) is going to take place in September

2011 for its projects, which will lend support to its revenue. Chennai desalination

project had revenue of ` 44lakhs/day during the quarter. Overall, the three road

projects and Chennai desalination project contributed ~ ` 62cr for the quarter.

On the under-construction projects front, work completed by the company

includes – Indore Gujarat project ( ` 700cr out of ` 1,300cr), Chengapalli ( ` 175crout of ` 900cr) and Baramati Phalthan ( ` 100cr out of ` 300cr). As far as the

under-development projects are concerned, IVRCL has started work on the Sion

Panvel and Chandrapur projects, which are expected to contribute to its revenue in




August 16, 2011

a couple of months; however, as the concession agreement for Goa Karnataka

project has not been signed, it will take another 6–8 months to start construction.

Margins under pressure

On the operating margin front, the company posted dismal margin of 7.6%

(9.1%), a dip of 150bp yoy against our estimate of 8.9%. As per management,

high material and labour costs and failure to pass on escalations in few water

projects (primarily in Tamil Nadu region, eligible to be claimed after 24 months)

have led to the poor performance at the margin level. We believe this scenario is

likely to continue for a few more quarters; hence, we have revised our margin

estimates to 8.8% (9.2%) and 9.2% (9.4%) for FY2012 and FY2013, respectively.

Exhibit 3: Execution slowdown – A cause of worry


Exhibit 4: Margin facing commodity price pressures


Bottom line pulled down by margin pressure and high interest cost

The below-par performance on the top-line front, EBITDAM front and high interest

cost led to an 85.0% yoy decline in earnings to ` 4.2cr ( ` 28.1cr). Interest cost for

the quarter came in-line with our expectation at ` 62.8cr, an increase of 38.8%

yoy. Further, going ahead interest rates are expected to remain high for the next

couple of quarters; hence, we have pruned our earnings estimate to ` 114.4cr

( ` 166.6cr) and ` 168.7cr ( ` 218.2cr) for FY2012 and FY2013, respectively, to

factor the same.

Exhibit 5: Earnings reflect poor revenue and margin show


Exhibit 6: Interest cost eating away the profitability


65.6

20.425.3

16.5

5.2 4.013.7

0.2

(11.7)

14.78.7

1.6

(45.0)

(25.0)

(5.0)

15.0

35.0

55.0

75.0

0

500

1,000

1,500

2,000

2,500

2 Q F Y 0 9

3 Q F Y 0 9

4 Q F Y 0 9

1 Q F Y 1 0

2 Q F Y 1 0

3 Q F Y 1 0

4 Q F Y 1 0

1 Q F Y 1 1

2 Q F Y 1 1

3 Q F Y 1 1

4 Q F Y 1 1

1 Q F Y 1 2

Sales (` cr, LHS) Growth (yoy %, RHS)

7.9

9.18.5

9.0 9.4 9.0

10.5

9.1 8.99.9

8.77.6

-

2.0

4.0

6.0

8.0

10.0

12.0

-

50.0

100.0

150.0

200.0

250.0

2 Q F Y 0 9

3 Q F Y 0 9

4 Q F Y 0 9

1 Q F Y 1 0

2 Q F Y 1 0

3 Q F Y 1 0

4 Q F Y 1 0

1 Q F Y 1 1

2 Q F Y 1 1

3 Q F Y 1 1

4 Q F Y 1 1

1 Q F Y 1 2

EBITDA (`cr, LHS) EBITDAM (%, RHS)

4.9

3.9

4.8

3.2

4.03.5

4.5

2.52.2

3.0 3.1

0.4

-

1.0

2.0

3.0

4.0

5.0

6.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2 Q F Y 0 9

3 Q F Y 0 9

4 Q F Y 0 9

1 Q F Y 1 0

2 Q F Y 1 0

3 Q F Y 1 0

4 Q F Y 1 0

1 Q F Y 1 1

2 Q F Y 1 1

3 Q F Y 1 1

4 Q F Y 1 1

1 Q F Y 1 2

PAT (` cr, LHS) PATM (%, RHS)

37.8

(6.5)(1.7)

(8.2)

4.2

42.6

(13.8)

6.1

23.2

10.9

(4.3)

(20.0)

(10.0)

-

10.0

20.0

30.0

40.0

50.0

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

3 Q F Y 0 9

4 Q F Y 0 9

1 Q F Y 1 0

2 Q F Y 1 0

3 Q F Y 1 0

4 Q F Y 1 0

1 Q F Y 1 1

2 Q F Y 1 1

3 Q F Y 1 1

4 Q F Y 1 1

1 Q F Y 1 2

Interest Cost (` cr) qoq growth (%)






August 16, 2011

Exhibit 10: SOTP valuation

Business Segment Methodology Remarks ` cr `/share

Construction P/E 7x FY2013E earnings 1,181 44.2

IVRAH Mcap 20% holding company discount 400 15.0Hindustan-Dorr-Oliver Mcap 20% holding company discount 121 4.5

Total 1,702 64


Exhibit 11: Key assumptions – Order inflow assumptions trimmed

(` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

Order inflow 8,795 6,421 8,696 12,400 7,640 9,621

Revenue 3,661 4,980 5,492 6,031 6,775 8,244

Order backlog (Y/E) 12,242 13,682 16,887 23,256 24,120 25,497

Order book/sales ratio (x) 3.3 2.7 3.1 3.9 3.6 3.1


Exhibit 12: Angel EPS forecast vs. consensus

Angel forecast Bloomberg consensus Variation (%)

FY2012E 4.3 6.9 61.0

FY2013E 6.3 8.4 33.0





August 16, 2011

Investment arguments

Equity infusion – The next catalyst: Given IVRCL’s equity commitment over the next

12–18 months, we believe it would dilute parent company’s stake in either IVRCL

Assets (IVRAH) or Hindustan Dorr Oliver and infuse the money in IVRAH for

mobilising its captive road projects. If IVRCL is able to achieve this, it would not

only improve its working capital cycle but also lend a fillip to execution for its

parent company.

Recent fall has led to undemanding valuations: The recent sharp fall in IVRCL’s

stock price has brought the stock at undemanding valuations. At current levels,

IVRCL is trading at valuations of mere 0.5x FY2013E P/BV and 6.3x PE

on FY2013E basis (standalone basis), which provides a good opportunity to enter

the stock.

Exhibit 13: Trading lower to its historical P/E multiple averages


Exhibit 14: Trading lower to its historical P/B multiple averages


0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

1 2 - A u g - 0 4

1 2 - D e c - 0 4

1 2 - A p r - 0 5

1 2 - A u g - 0 5

1 2 - D e c - 0 5

1 2 - A p r - 0 6

1 2 - A u g - 0 6

1 2 - D e c - 0 6

1 2 - A p r - 0 7

1 2 - A u g - 0 7

1 2 - D e c - 0 7

1 2 - A p r - 0 8

1 2 - A u g - 0 8

1 2 - D e c - 0 8

1 2 - A p r - 0 9

1 2 - A u g - 0 9

1 2 - D e c - 0 9

1 2 - A p r - 1 0

1 2 - A u g - 1 0

1 2 - D e c - 1 0

1 2 - A p r - 1 1

1 2 - A u g - 1 1

P/E 7YEAR AVG 5YEAR AVG 3YEAR AVG

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1 2 - A u g - 0 4

1 2 - D e c - 0 4

1 2 - A p r - 0 5

1 2 - A u g - 0 5

1 2 - D e c - 0 5

1 2 - A p r - 0 6

1 2 - A u g - 0 6

1 2 - D e c - 0 6

1 2 - A p r - 0 7

1 2 - A u g - 0 7

1 2 - D e c - 0 7

1 2 - A p r - 0 8

1 2 - A u g - 0 8

1 2 - D e c - 0 8

1 2 - A p r - 0 9

1 2 - A u g - 0 9

1 2 - D e c - 0 9

1 2 - A p r - 1 0

1 2 - A u g - 1 0

1 2 - D e c - 1 0

1 2 - A p r - 1 1

1 2 - A u g - 1 1

P/B 5YEAR AVG 3YEAR AVG 7YEAR AVG




August 16, 2011

Exhibit 15: Recommendation summary

Company CMP (`) TP (`) Rating Top-line (`cr) EPS (`) Adj. P/E OB/

FY11 FY12E FY13E CAGR (%) FY11 FY12E FY13E CAGR (%) FY11 FY12E FY13E Sales(x)

CCCL 22 - Neutral 2,199 2,362 2,646 9.7 2.5 1.5 3.6 18.4 8.7 14.8 6.2 2.8HCC 28 - Neutral 4,093 4,723 5,485 15.8 1.2 0.7 1.2 1.0 (1.9) (3.3) (1.9) 4.2

IRB Infra 156 191 Buy 2,438 3,024 3,995 28.0 13.6 13.0 14.5 3.3 5.5 5.8 5.1 -

IVRCL 40 64 Buy 5,651 5,798 6,994 11.2 5.9 4.3 6.3 3.3 2.2 3.0 2.0 4.2

JP Assoc. 57 108 Buy 13,217 15,860 18,708 19.0 3.1 5.1 6.8 48.8 18.6 11.1 8.4 -

Punj Lloyd 56 - Neutral 7,850 9,585 10,992 18.3 (5.4) 2.5 4.0 - - 22.6 13.9 2.8

NCC 54 82 Buy 5,074 5,755 6,689 14.8 6.4 5.5 6.7 2.4 4.0 4.7 3.9 3.2

Sadbhav 143 161 Accu. 2,209 2,602 2,865 13.9 8.0 8.4 11.4 19.6 8.8 8.3 6.1 3.2

Simplex In. 280 306 Accu. 4,896 5,373 6,221 12.7 25.1 22.3 30.6 10.4 11.2 12.6 9.1 2.9

Patel Engg 105 - Neutral 3,499 3,272 3,587 1.2 18.4 15.5 23.0 11.8 1.2 1.5 1.0 2.7

Madhucon 71 106 Buy 1,705 1,898 2,434 19.5 6.9 6.7 8.4 10.2 3.5 3.6 2.9 3.5

L&T 1,622 1,946 Buy 43,905 52,765 66,551 23.1 54.7 64.9 80.0 20.9 21.6 18.2 14.8 3.1

ITNL 186 259 Buy 4,049 4,910 6,484 26.5 22.3 23.9 25.3 6.4 0.8 0.7 0.7 5.5


Exhibit 16: SOTP break-up

Company Core Const. Real Estate Road BOT Invst. In Subsidiaries Others Total

` % to TP ` % to TP ` % to TP ` % to TP ` % to TP `CCCL 28 100 - - - - - - - - 28

HCC 11 26 23 58 6 16 - - - - 40

IRB Infra 110 58 - - 77 40 5 2 - - 191IVRCL 44 69 - - - - 20 31 - - 64

JP Assoc. 32 30 31 29 - - - - 44 41 108

Punj Lloyd 96 100 - - - - - - - - 96

NCC 53 65 2 2 8 10 - - 18 22 82

Sadbhav 87 54 - - 73 46 - - - - 161

Simplex In. 306 100 - - - - - - - - 306

Patel Engg 61 43 47 33 16 11 - - 19 14 143

Madhucon 59 55 2 2 33 31 - - 12 12 106

L&T 1,508 77 - - - - 438 23 - - 1,946

ITNL 90 35 - - 143 55 - - 25 10 259





August 16, 2011

Profit and loss (Standalone)

Y/E March (` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

Gross sales 3,661 4,980 5,492 5,651 5,798 6,994

Less: Excise duty - - - - - -Net Sales 3,661 4,980 5,492 5,651 5,798 6,994

Other operating income - - - - - -

Total operating income 3,661 4,980 5,492 5,651 5,798 6,994

% chg 56.0 36.1 10.3 2.9 2.6 20.6

Total Expenditure 3,299 4,559 4,961 5,137 5,287 6,352

Net Raw Materials 1,247 1,658 1,915 1,997 1,913 2,287

Other Mfg costs 1,899 2,687 2,825 2,877 3,092 3,715

Personnel 153 214 221 262 282 350

Other - - - - - -

EBITDA 361.4 421.8 531.3 514.6 511.4 642.3

% chg 57.0 16.7 26.0 (3.1) (0.6) 25.6

(% of Net Sales) 9.9 8.5 9.7 9.1 8.8 9.2

Depreciation& Amortisation 32.8 47.3 54.3 75.8 93.2 106.4

EBIT 328.6 374.5 477.0 438.8 418.2 535.9

% chg 57.6 14.0 27.4 (8.0) (4.7) 28.1

(% of Net Sales) 9.0 7.5 8.7 7.8 7.2 7.7

Interest & other Charges 47.8 198.0 212.0 255.0 302.8 345.5

Other Income 4.5 97.3 63.9 49.0 53.9 59.3

(% of PBT) 1.6 35.6 19.4 21.0 31.8 23.7

Share in profit of Associates - - - - - -

Recurring PBT 285.3 273.8 328.8 232.8 169.3 249.7

% chg 54.1 (4.0) 20.1 (29.2) (27.3) 47.5

Extraordinary Expense/(Inc.) - - - - - -

PBT (reported) 285.3 273.8 328.8 232.8 169.3 249.7

Tax 74.9 47.8 117.5 74.7 54.9 81.0

(% of PBT) 26.2 17.5 35.7 32.1 32.4 32.4

PAT (reported) 210.5 226.0 211.3 158.1 114.4 168.7

Add: Share of earn. of asso - - - - - -

Less: Minority interest (MI) - - - - - -

Prior period items - - - - - -

PAT after MI (reported) 210.5 226.0 211.3 158.1 114.4 168.7ADJ. PAT 210.5 226.0 211.3 158.1 114.4 168.7

% chg 48.8 7.4 (6.5) (25.2) (27.6) 47.5

(% of Net Sales) 5.7 4.5 3.8 2.8 2.0 2.4

Basic EPS (`) 15.5 16.7 7.8 5.9 4.3 6.3

Fully Diluted EPS (̀ ) 7.9 8.5 7.9 5.9 4.3 6.3

% chg 48.8 7.4 (6.5) (25.2) (27.6) 47.5




August 16, 2011

Balance sheet (Standalone)

Y/E March (` cr) FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

SOURCES OF FUNDSEquity Share Capital 26.7 26.7 53.4 53.4 53.4 53.4

Preference Capital - - - - - -

Reserves& Surplus 1,579 1,784 1,800 1,934 2,024 2,167

Shareholders’ Funds 1,606 1,811 1,853 1,987 2,077 2,221

Minority Interest - - - - - -

Total Loans 1,068 1,398 1,613 2,096 2,199 2,919

Deferred Tax Liability 10.3 11.7 12.5 8.6 8.6 8.6

Total Liabilities 2,684 3,220 3,478 4,092 4,285 5,148

APPLICATION OF FUNDS

Gross Block 418 662 750 935 1,060 1,210

Less: Acc. Depreciation 98.4 141.7 183.8 259.6 352.8 459.2

Net Block 319 521 566 676 707 751

Capital Work-in-Progress 54.1 19.6 35.3 42.1 44.1 46.8

Goodwill - - - - - -

Investments 341 389 614 635 685 735

Current Assets 3,058 4,014 4,952 5,703 5,861 7,373

Inventories 194.3 209.3 244.7 273.2 294.3 372.8

Debtors 834 1,343 2,196 2,181 2,011 2,481

Cash 177 101 164 143 173 173

Loans & Advances 922 1,199 661 953 1,174 1,416

Other 930 1,162 1,686 2,153 2,209 2,931

Current liabilities 913 1,523 2,437 2,713 2,749 3,481

Mobilisation Advance 175 200 251 251 264 277

Net Current Assets 1,970 2,291 2,264 2,739 2,848 3,616

Misc. Exp. not written off - - (1) - - -

Total Assets 2,684 3,220 3,478 4,092 4,285 5,148






August 16, 2011

Key ratios

Y/E March FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

Valuation Ratio (x)

P/E (on FDEPS) 5.0 4.7 5.0 6.7 9.2 6.3P/CEPS 4.3 3.9 4.0 4.5 5.1 3.8

P/BV 0.7 0.6 0.6 0.5 0.5 0.5

Dividend yield (%) 3.5 3.5 3.8 4.0 4.3 4.6

EV/Sales 0.5 0.5 0.5 0.5 0.5 0.5

EV/EBITDA 5.4 5.6 4.7 5.8 6.0 5.9

EV / Total Assets 0.7 0.7 0.7 0.7 0.7 0.7

Per Share Data (`)EPS (Basic) 15.5 16.7 7.8 5.9 4.3 6.3

EPS (fully diluted) 7.9 8.5 7.9 5.9 4.3 6.3

Cash EPS 9.1 10.2 9.9 8.8 7.8 10.3

DPS 1.4 1.4 1.5 1.6 1.7 1.8

Book Value 60.1 67.8 69.4 74.4 77.8 83.2

Du Pont Analysis

EBIT margin 9.0 7.5 8.7 7.8 7.2 7.7

Tax retention ratio 73.8 82.5 64.3 67.9 67.6 67.6

Asset turnover (x) 1.8 1.8 1.7 1.6 1.4 1.5

ROIC (Post-tax) 11.6 11.0 9.5 8.2 7.0 8.0

Cost of Debt (Post Tax) 4.3 13.3 9.1 9.3 9.5 9.1

Leverage (x) 0.4 0.6 0.7 0.9 1.0 1.1

Operating ROE 14.6 9.5 9.9 7.2 4.5 6.7

Returns (%)

ROACE (Pre-tax) 14.4 12.7 14.2 11.6 10.0 11.4

Angel ROIC (Pre-tax) 15.8 13.3 14.8 12.1 10.4 11.8

ROE 14.4 13.2 11.5 8.2 5.6 7.9

Turnover ratios (x)

Asset Turnover (Gross Block) 10.8 9.2 7.8 6.7 5.8 6.2

Inventory / Sales (days) 14 14.8 15.1 16.7 17.9 17

Receivables (days) 81 80 118 141 132 117

Payables (days) 99 94 142 180 185 174

W.cap cycle (ex-cash) (days) 146 146 143 152 166 160

Solvency ratios (x)Net debt to equity 0.6 0.7 0.8 1.0 1.0 1.2

Net debt to EBITDA 2.5 3.1 2.7 3.8 4.0 4.3

Interest Coverage 6.9 1.9 2.2 1.7 1.4 1.6




August 16 2011

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

DISCLAIMER

This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investmentdecision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make

such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies

referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and

risks of such an investment.

Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make

investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this

document are those of the analyst, and the company may or may not subscribe to all the views expressed within.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .

Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,compliance, or other reasons that prevent us from doing so.

This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly.

Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or

other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or inthe past.

Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in

connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, pleaserefer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited andits affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement IVRCL

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to 15%) Sell (< -15%)

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