IL&FS Transportation Networks Ltd (ITNL) is an established surface transportation infrastructure company. It is one of the largest private sector BOT road operators in India. ITNL is a developer, operator and facilitator of surface transportation infrastructure projects, taking projects from conceptualization through commissioning to operations and maintenance. ITNL was incorporated in 2000 by IL&FS, an infrastructure development and finance company, in order to consolidate their existing road infrastructure projects and to pursue various new project initiatives in the area of surface transportation infrastructure. In March 2008, ITNL commenced international operations through the acquisition of Elsamex S.A. (“Elsamex“), a provider of maintenance services primarily for highways and roads in Spain and other countries.
Since inception, ITNL has been involved in the development, operation and maintenance of national and state highways, roads (including urban roads), flyovers and bridges in Andhra Pradesh, Delhi, Gujarat, Maharashtra, Karnataka, Uttar Pradesh, Kerala, Jharkhand and Rajasthan.
ITNL benefits significantly from its affiliation with IL&FS, which has an established track record in promoting and financing a range of public infrastructure projects in India for over 21 years. IL&FS was incorporated in 1987 and its shareholders include Life Insurance Corporation of India, Central Bank of India, State Bank of India, Housing and Development Finance Corporation Limited, Abu Dhabi Investment Authority and Orix Corporation of Japan.
IL&FS TRANSPORTATION NETWORKS’ FINANCIAL RESULTS
ITNL reported strong consolidated numbers for the financial year ended 31.3.2010. ITNL’s sales / income from operations were Rs. 2402.88 crores on which ITNL earned a EBITA (before other income of Rs. 74.15 crores) of Rs. 744.05 crores leading to a margin of Rs. 30.96% of sales. The Net Profit after Tax was Rs. 338.30 crores leading to a margin of 14% of sales.
The capital employed was Rs. 1668.64 crores. The Return on Capital Employed (ROCE) (EBITA / Capital Employed) as of 31.3.2010 was 44.59%.
The Return on Equity (“ROE”) (Net Profit /Equity & Reserves 1668.27 crs) was 20.27%.
The Earnings Per Share (“EPS”) was Rs. 19.97 which at the CMP of Rs. 275 translates to a PE of 13.77.
The dividend proposed is Rs. 3 per share (30%) which translates to a yield of 1.09% at the CMP of Rs. 275.
The Debt (Rs. 3321.50 crores) to Equity (1,737.30 crores) ratio is 1.91 : 1.
IL&FS TRANSPORTATION NETWORKS’ Future Prospects
In an interview with CNBC-TV18, Mukund Sapre, ED, IL&FS Transportation pointed out that NHAI and Ministry of Road Transport and Highways has planned projects worth about Rs 54,000 crore and IL&FS Transportation could be expected to improve upon this year’s performance. He also said that in FY 2010 IL&FS Transportation bagged around Rs 8,000 crore of projects from NHAI and Metro rail project, out of which it had already closed Rs 6,000 crore of project.
As regards FY 2011, he said that IL&FS Transportation had already been declared preferred bidder on three projects worth around Rs 6,200 crores. He said that if around Rs 2000-3000 crores of projects could be obtained, there would be a handsome growth on the bottom line. He, however, stated that IL&FS Transportation’s Spanish subsidiary Elsamex was not doing too well owing to the poor economic environment there. It contributed to the top line by about 140 million though it had not suffered a loss.
IL&FS Transportation enjoys good revenue visibility because about two thirds of its revenues are from the collection of toll. Other companies in the Industry such as IRB Infrastructure Developers and IVRCL Infrastructure and Projects which are quoting at more expensive valuations.
IL&FS TRANSPORTATION NETWORKS’ Research Report
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