Institutional Equities - Online Share Trading

Institutional Equities
Table of Contents
Cyclical nature of infrastructure sector………………………………………………………………...….03
Stress case valuation level indicating downturn is already priced in.........…………………….……..04
Our mode of valuation………………………………………………………………………….……….….07
RoE trend of BOT projects…………………………………………………………………………………09
Further earnings downgrade due to rising interest rates to be limited………………………..………11
Our estimates versus consensus: Improvement expected in FY13…………………………..………12
Short-term hiccups in order inflow, but long-term growth intact…………………………………….…13
Road segment: Improvement in order inflow, but at a cost………………………………………….…15
Power segment: Capacity up, but operational issues hurt future valuation …………………………19
Key operational issues in power sector and our view ………………………………………….………20
Funding problems for big scale 12th Plan infrastructure spending ………………………….….……22
Project execution uncertainty in near term, but FY13 to witness strong growth…………….………23
Initiating coverage on five infrastructure companies………………………………….……….……….25
Companies
IRB Infra……………………………………………………………………………….…………..….……27
Reliance Infra………………………………………………………………………………...…….….…..41
GMR Infra……………………………………………………………………………………………..……55
HCC. ………………………………………………………………………………...………….……….…67
IVRCL ………………………………………………………………………………...………….……..….79
2 Infrastructure Sector