13 September 2009
IVRCL : THE FUNDAMENTALS
In the previous post (read here) we spoke about the business of IVRCL. Here let us look at its fundamentals first and then the valuations.
The company has 13.35 cr shares with a face value of Rs 2 (after a 1:5 split in Mar 06) and a Book Value of Rs 135. The current market price is Rs 379.
Its turnover rose five times in four years i.e from Rs 1054 Cr to Rs 4983 Cr. At the current price its a Market cap : Sales of 1. Y-o-Y it is up 35 % from 3698 Cr. There is revenue visibility of upto 2.5 years . Q-o-Q the sales are up 17% despite Jun traditionally being a slow qtr.
PAT rose 4.5 times in four years i.e from Rs 56 Cr to Rs 226 Cr. (Infra is typically a low margin(single digit) business). EBIDTA at Rs 451 Cr translates to a margin of 9.06% down from 9.9 % last year and an EPS 0f 16.93. At the current margins the estimated EPS for FY 2010 would be 19.8.
Though the debt equity ratio at .77 is higher than what a typical conservative investor would be comfortable with (.5) , IVRCL has a Compund Leverage Factor of over 1 for the last two years, indicating a positive contribution of leverage towards the Return on Equity, which is currently at 12.5 %, down from 13.13% last year.
This company has consistently given a dividend for the last ten years!
The current price of Rs 379 implies a TTM PE of 23.16 and a forward PE of 19.13. A shade more expensive than I am comfortable with. So - buy on dips is the mantra for this stock. Remember , the best things in the stock market come at a price!
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