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Tuesday, May 10, 2011

Stock Review: IL&FS TRANSPORTATION NETWORKS

IL&FS Transportation Networks (ITNL) is a leading player in the country's road infrastructure segment with 22 projects, out of which about 4,200 lane km are operational and another 7,700 lane km are under development. Considering its scale, strong backing of its promoters, industry understanding, superior execution capabilities and an integrated business model the company should benefit from opportunities in the road sector. The company plans to take its portfolio of road projects to 36,000 lane km by 2014. Apart from road projects, the company also has construction orders of about `11,000 crore, eight times its annual construction revenue. Its profit growth is expected to be 20 per cent over the next two years. At `237, the stock is trading at reasonable valuations of nine times its FY12 estimated earnings. Analysts have pegged its sum-of-the-parts value at `305.

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