Merrill Lynch puts a BUY on IVRCL Infra with a Price Target of Rs 421

(My Original Blog Post: http://www.onlineequitycalls.com/2008/12/merrill-lynch-puts-a-buy-on-ivrcl-infra-with-a-price-target-of-rs-421/)
Merrill Lynch
India Research
IVRCL Infrastructures (IIFRF)-Reiterate BUY with a PO of Rs 421

Our PO of Rs 421 is based on the SOTP valuation. We have valued IVRCL core construction business 12x estimated 1 year forward earnings, a 25pct discount to E&C majors at Rs304 per share.

Hind-dorr-Oliver where IVRCL has 52.8pct stake is valued at CMP giving a per share value of Rs6 IVR Prime where IVRCL has 62.3pct stake is valued at 60pct discount to NPV at Rs62 per share in line with Mid Cap real estate companies.

Chennai desalination plant where IVRCL has 75pct stake is valued on a DCF basis at Rs12 per share. Similarly, Jalandhar-Amritsar project, Kumarapalayam-Chengapally project, and Salem-Kumarapalayam project where IVRCL has 100pct stake are valued based on DCF of Rs7, Rs12 and Rs17 per share respectively.

We arrive at an SOTP value of Rs421. Risks: Unrelated acquisition in Oil & Gas space, Government capex, raw material costs, competition, traffic/interest rate risk in toll/annuity projects and project execution risk.



Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

Source : Maverick

IVRCL shares up 2% on Rs 746 crore orders

(My Original Blog Post: http://www.onlineequitycalls.com/2008/12/ivrcl-shares-up-2-on-rs-746-crore-orders/)
MUMBAI: Shares of IVRCL Infrastrcuture & Projects gathered momentum Tuesday after it announced that the buildings and industrial division of the company bagged orders worth Rs 746.26 crore.

The orders were for works across the country. The realty firm will undertake a turnkey housing project for AP Cine Workers Co-operative Housing Society at Hyderabad for Rs 550.28 crore.

The second order worth Rs 114.35 crore was for the construction of a CIDCO Exhibition Centre at Vashi. It will also provide EPC services on turnkey basis for new habitation for tsunami affected victims at Puduchery worth Rs 70.62 crore and also the construction of an IT park at Durgapur for Rs 11.01 crore.

At 1 pm, IVRCL shares were up 2.35 per cent at Rs 168 after touching a high of Rs 172.40.

Source : Economic Times

George Bush

(My Original Blog Post: -*http://www.onlineequitycalls.com/2008/12/george-bush/)
President Bush has not endeared himself to the world during his Presidency...90% of his Presidency was post 9/11 and protecting America was his first goal and removing threats to America was his second goal.  In time we will know the success or failure of his administration.

9/11 was the first foreign attack on American soil since Pearl Harbor in 1941...looking through this lens gives you some perspective on George Bush's priorities.

From the perspective of India, after the disastrous Clinton years, George Bush has been a good friend...no emotions, no nonsense.  He recognized the reality of India, the incorrectness of Clinton's behaviour and policies and set about correcting the relationship.  India's needs and wants were given their rightful place; the historical significance of India's achievements in democracy and economic growth was recognized and responsibile behaviour with respect to nuclear proliferation was rewarded.  Today, the great democracies share a special and growing relationship...while it is a little like being in a cage with an elephant...George Bush has single handedly transformed this relationship.

While it is possible the USA is safer today what about the World?  I can only point again to the resources in manpower and finance that the USA is expending around the world to fight the war on terrorists.  India, the Middle-East and Asia have prioritized and executed short term tactics.  USA on the other hand usually has a very long term objective and uses short-term tactics and strategies in pursuance of the longer term goal.  I can only tell you that India and the Middle-East have not been successful in keeping our nations or neighborhood safe.  While I lament the loss of life in the Iraq war and perhaps even the loss of "International Law" no one will argue the case for restoring Saddam Hussein.  We are all glad to be rid of the dictator...as long as we did not have to do the dirty work.

Is Iraq better off today?  I do not know, however, amongst the rubble and terrorist attacks I see Iraqis arguing and fighting about their future.  Surely that is a good sign...if the people get representation there is hope for the future.

A couple of days ago a newsman threw shoes at President Bush during a news conference in Baghdad...the agile President ducked but the newsman was pinned and jailed...there are demonstrations in Baghdad for the newsman's release and he is being hailed as a hero.  Would they prefer Saddam Hussein?  These people do not even appreciate the fact that they are now able to demonstrate, freely....amazing denial of reality.  If the shoe had been thrown at Saddam what would have happened to the newsman?

I have included the BBC link for the "shoe attack"  but watch the ending short interview clip with President Bush; he says "I don't know what his beef is"  referring to the newsman who threw the shoe.  This naivete is infuriating...if the shoe had hit his head I wonder if it would have jarred enough neurons to understand the source of all the anger.