IVRCL posted healthy numbers for Q1FY09 with revenues for the current quarter registering 37% growth y-o-y, inline with our expectations.
Operating margins for the recently concluded quarter stood at 8.8% which is slightly lower than our estimates. This was due to higher sub contracting charges in the current quarter.
Company still claims the benefits under Section 80IA, resulting in lower tax paid as against our expectations. Net profit for the current quarter registered a growth of 15% y-o-y, resulting in net profit margins of 4.7%.
With a robust order book of Rs150 billion, we expect the revenues to grow at a CAGR of 31% between FY08-FY10 and profits to grow at a CAGR of 20% between FY08-FY10.
At current price of Rs300, stock is trading at 16.3x and 13.4x its P/E multiples on FY09 and FY10 estimates respectively.
Net of BOT valuations, stock is trading at very attractive valuations of 11.3x and 9.3x its P/E multiples on FY09 and FY10 estimates respectively. We maintain BUY with a price target of Rs474.