IL&FS Transportation Networks December Quarter Results Review

Road infrastructure major IL&FS Transportation Networks (ITNL) has reported a 74 per cent (YoY) rise in its net sales to Rs 1,268 crore for the December quarter of the year 2011 as compared to Rs 734 crore in the previous year same period. The stupendous rise in topline can be attributed to higher contribution from its construction activity income which increased by 125 per cent (YoY) to Rs 905 crore.

During the quarter the company had to incur some exceptional one-time expenses which were accounted for under ‘other’ expenditure. The construction costs also shot up as a result of increased construction activity which consequently impacted the EBIDTA margins. Despite an EBIDTA level growth of 47 per cent to Rs 350 crore, the margins declined by 482 bps to 27.63 per cent.

The interest expense of the company rose sharply by 61 per cent (YoY) to Rs 185 crore, which put further pressure on its bottomline. While the net profits for the period October-December 2011 stood at Rs 88 crore as compared to Rs 62 crore last year, the PAT margins declined by 150 bps to 6.92 per cent.

The consolidated debt of the company stands at Rs 9,386 crore, which translates into a D/E ratio of 3.49x. The increase in the debt level was largely due to the acquisition of Chongqing YuHe Expressway (China) and draw down for under construction projects.

Moving on, ITNL has an order book amounting to Rs 10,000 crore (ITNL share) coupled with a bid pipeline of Rs 56,825 crore in various stages of qualification as on January 31, 2012 which provides a fair revenue visibility. The average toll-cum-annuity revenue has also seen a decent increase of 28 per cent YoY to Rs 1.9 crore per day.

ITNL is India’s largest road infrastructure company in terms of lane km (7,150 lane km) costing Rs 13,371 crore. It is a pioneer in road ‘build operate transfer’ (BOT) space with a project portfolio of 24 projects panning across the entire length and breadth of the country. Around 54 per cent of its projects are currently operational and the remaining is at various stages of construction and development which will be ready in 3-4 years. Apart from this, the company also has a minor presence in other non-road infra-related activities like metro rail and bus system, etc.