IRB Infrastructure
Reco Price: Rs 257
Target Price: Rs 310
IRB's adjusted profit after tax (PAT) for the first quarter of the current financial year (Q1FY11) at Rs 103 crore (up 25.8 per cent year-on-year, or y-o-y) was ahead of expectations, driven by better-than-expected construction margins (24.2 per cent) and lower interest outgo. Revenues at Rs 510 crore were up 23.6 per cent, aided by 26.7 per cent growth in the build, operate, transfer (BOT) segment and 20.1 per cent growth in the construction segment. IRB’s earnings before interest, taxes, depreciation and amortisation (Ebitda) at Rs 249 crore surged 50 per cent y-o-y and was driven by 145 per cent growth in construction Ebitda. Emkay expects the construction vertical to pick up traction in the second half, led by execution of four new BOT projects (total project cost of Rs 4,300 crore) bagged in FY10. Earnings at a compounded annual growth rate (CAGR) of 20 per cent and a huge BOT opportunity should fuel stock outperformance. Maintain accumulate.
— Emkay Research
Angel Research
Reco Price: Rs 533
Target Price: Rs 584
Healthy loan growth enabled strong growth in net interest income of 31 per cent, while PAT at Rs 74.2 crore was up by 86 per cent y-o-y. Asset quality has improved as indicated by low non-performing assets (NPAs), and is expected to improve further given the post-harvest period and festival season. With improving macro economic conditions, we believe M&M Financial will continue to benefit from the rising rural demand. Going forward, we expect the car financing, commercial vehicle (CV) financing and refinance segment to be the major growth drivers for the company. We expect the net interest income to register a CAGR of 25 per cent and earnings to register growth of 23 per cent during FY10-12. Buy on declines
— Asit C Mehta
