SREI (the parent company) in consortium with Amex International has received a light-rail (metro) development project from West Bengal government.
The company is expected to be the majority stakeholder and is the lead in consortium for the Rs60 billion project that is expected to complete in next 4-5 years.
The project is at an initial stage, details pertaining to economic interest, funding requirement and capital structure have yet not been worked out.
Although the project offers an attractive opportunity to SREI, we opine that this would not have any significant impact for SREI’s during FY09 and FY10.
We continue to maintain our estimates for SREI Infrastructure Finance. The management has indicated that the overall business sentiment has improved relatively, however, it has not gain momentum, and we will revisit our estimates post Q4FY09 results.
We continue to maintain our ACCUMULATE recommendation for the stock with a price target of Rs45.