Dear Investor,

Subject: Best Buy - IVRCL INFRASTRUCTURES & PROJECTS LIMITED

Fresh selling in   index   pivotals pulled the key benchmark indices to the day's low in mid-afternoon trade.   The market   fell defying strength in European   stocks   and despite gains in US   index   futures.   The market   fell today as investors priced in the sharp weakness in global markets on Friday, 2 October 2009, when the   Indian market   was closed for a   public holiday . The BSE 30-share Sensex was down 222.03 points or 1.29%, off 149.99 points from the day's high and up 21.19 from the day's low. This gives good opportunity for buying. We are suggesting you to buy IVRCL infra. Ltd.

IVRCL INFRASTRUCTURES & PROJECTS LIMITED.

CMP	Rs.360
52 week High	Rs.400
52 week Low	Rs.56
Market Cap	Rs. 4884 crores

 

Company Background

Incorporated in 1987, IVRCL is a Hyderabad based construction company, present in most of the verticles of infrastructure space like Water & Irrigation, Transportation, Power T&D and Buildings and Industrial structures. The company is betting big on irrigation and water opportunity in India and has maintained its un-disputed leading position in the segment. Acquisition of Hindustan Dorr Oliver has improved its presence in water and environmental engineering space. Going forward, the management has given indication of tapping upcoming opportunity in power transmission.

Infrastructure Industry –Opportunities Unlimited

There is a little doubt that the infrastructure industry in India is to play a vital role in nation's progress towards achieving the status of a 'developed nation'. The government has realized that the infrastructure related inadequacies will put a significant constraint in realizing the nation's growth potential. Consequently, the planned investment in the 11th five year plan is 136% higher over the anticipated investment in the 10th five year plan. Irrigation, roads and highways and power have witnessed 129%, 117% and 127% growth in the 11th five year plan and account for almost 60% of the total outlay. With the new government in place, there are strong expectations that going forward these infrastructure initiatives will get a further emphasis in terms of execution and incremental investments.

Healthy Order Book Provides Revenue Visibility

The current order book of the company stands at Rs 13900 Cr with a further Rs 1000 Cr of projects having L1 status. Irrigation projects account for 69% of the total followed by 22% contribution from Buildings and Industrial Structures unit. Going forward we expect the order book to witness robust growth mainly from the order wins in Irrigation, power and road sector.

Valuation

We believe that IVRCL will continue tapping huge opportunities in irrigation and water related projects. While over the past couple of years the company has strengthened its position in Buildings and Industrial Structures segment, going forward, power transmission and roads related projects will increasingly contribute to the growth. We suggest you to buy this stock at market price. Investors who had already invested in IVRCL Infra can continue holding it while others can look at the stock on declines.

We remain bullish on IVRCL and retain OUTPERFORMER rating.

Awaiting for your quick Response.

Thanks and regards,

PMS Team