IVRCL sees FY11 order book at Rs32,000 crore

IVRCL sees FY11 order book at Rs32,000 crore

Mumbai: IVRCL Infrastructures & Projects Ltd expects the order book to rise to Rs32,000 crore in FY11 on a rise in government orders, even as its FY10 net profit was hurt by a rise in income tax, a top official said.

India is boosting infrastructure spending, with the finance minister allocating 46% of FY11’s total budget allocation for infrastructure development in the country.

“It’s all across, there is nothing special or specific (sectors). If the government is spending $1 trillion on infrastructure, somebody has to get (those orders)...," the company’s chief financial officer S V Ramkumar told Reuters in an interview.

The construction firm is expecting orders from roads, power transmission, water, building of industrial structures and oil gas sectors, he added.

IVRCL Infrastructure has posted a net profit of Rs211 crore for FY10, down from Rs226 crore a year ago, while March-quarter profit rose 6.7% to Rs852.4 million.

Its order book stood at Rs23,400 crore as on 29 May, and the Hyderabad-based firm has bid for orders worth Rs19,500 crore, it said in a statement issued over the weekend.

IVRCL expects Rs7,000 crore revenue in FY11, up from around Rs5500 crore this year, Ramkumar said.

The company, which has a net debt of Rs1,450 crore as on 31 March, is also hopeful of bagging some projects in a month’s time. He, however, did not provide further details.

IVRCL is also looking at selling off parts of its land bank across Chennai, Visakhapatnam, Bangalore, Pune and Noida. It has a land bank of around 3,000 acres.

“Hopefully in the next one quarter of so you would hear some news on land sale," Ramkumar said, without elaborating.

Income Tax Impact

The company’s bottomline was hurt by the withdrawal of a tax rebate which pushed up its tax rate to 33% in FY10 from 17-18% in FY09, he said.

A Reuters poll of brokerages had pegged the quarterly profit of IVRCL at Rs888.25 million.

“The company is doing good right now, I guess the execution has picked up and even though there are problems in Andhra Pradesh (Telangana issue) they have managed a significant quantity of fresh orders from subsidiary IVR Prime," Abhinav Bhandari, analyst at Elara Capital, said.

IVRCL’s 4QFY10 and FY10 results “were in line with our expectations", Macquarie Equities Research said in its note, adding it maintains an “outperform" rating on the stocks.

The analyst firm expects a strong revival in execution for IVRCL, which should help it post a 26% revenue growth in FY11, it added.

Shares of the company closed up 7.69% at Rs167.95 a share in a strong Mumbai market that closed up 0.48%.