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12 September 2009


In the previous post (read here) I pointed you in the general direction of infrastructure spend in the country. Now we move on to the specifics. We discuss a company which dominates a crucial segment of the sector and has presence in a majority of them - IVRCL Infrastructure Ltd.

This company is a market leader in water and irrigation infrastructure development. It also has presence in transportation, building, industrial construction and power transmission. Of late it has also forayed into projects related to hydro power and railways. 

With 69 % of the order book being from the water and irrigation segment, it is correct to classify IVRCL as a 'Bridge over Troubled Waters' ! (I know Simon and Garfunkel will not agree to this allegory). But lets have a closer look here.

Water is a Rs 6000 Cr industry in India with waste water treatment (read here) and drinking water (read here) taking the lions' share at Rs 3000 Cr and Rs 2000 Cr respectively. This industry is growing at 18-20 % per annum. This is the dominant vertical for IVRCL wherein it constructs, owns and operates water projects. It executes lift irrigation and reservoir projects, drinking water and sewerage schemes,treatment plants and pipelines, main and distributary canal networks, industrial water solutions and desalination plants. Suffice it to say it has a diversified portfolio in this very important segment. We have in a previous post (read here) discussed the importance of water and how it impinges on life in general and businesses in particular.

Transportation is a segment which accounts for almost 5 % of the order book. In this segment IVRCL focuses on the ongoing NHAI projects which it is executing while bidding for the future road, rail, bridging and tunneling projects on a turnkey basis. It is also bidding for the dedicated rail freight corridor between Delhi and Mumbai as well as working on the Bangalore Metro.

The other segments and their contribution to the order book (Rs 13,682 Cr) is given in the graphic below.

Just as an aside, if you look for this company on www.Valueresearchonline.Com, a total of 120 mutual funds own this stock compared to 19 for GMR Inf (its closest rival). 

Having become acquainted with the business of IVRCL, in the next post we will have a closer look at its fundamentals IVRCL and the likely valuations.


sumi said...

IVRCL has a good business model it will be nice to read about the fundamentals and valuations. As you have mentioned it is owned by 120 funds all ready. People have noticed this stock and the valuation will not be very attractive from this point onwards. It has a concern about a large amount of debt also which needs to be addressed.Based on fundamental it is much stronger than GMR infra. Will wait for the next post.

Puneet said...

@ Sumi,
Thanks for the post. Will keep you posted soon.

Donald said...

What's your email id sir??

Puneet said...

You can contact me at

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