For Q4FY09, IVRCL reported 23% y-o-y growth in revenue and 9% y-o-y growth in PAT (restricted by 88% y-o-y rise in interest cost).
FY09 EBITDA margin at 8.6% was down 130bps (down 178bps to 8.7% in Q4), mainly due to lower profitability from initial projects in power T&D.
We expect margin to improve in FY10 as low margin projects (BOT, Power T&D) are nearing completion.
Current order backlog of Rs145bn, 3x FY09 sales, provides visibility for 30% revenue growth in FY10. The stock trades at 15.4x FY10E earnings, in line with peers.
We recommend BUY with a long-term perspective (high topline visibility and improving margin).
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