Stock Picks: IL&FS Engineering & Construction Company Ltd.

by khalid on 12/09/2011 · 0 comments

The stock IL&FS Engineering has not performed from the last 6 months. The stock is struggling because of its debt restructuring. They are logging their claim of Mahindra Satyam and are hopeful of recovering Rs 350 crores from them. They have also made one time settlement with it debtors. IL&FS  has inducted an investor for a stake of 32 % from the Middle East, acquiring shares at Rs 185. Further to this it has placed an open offer at Rs 195.

The promoter IL&FS is holding about 35 per cent along with 32 per cent by a foreign investor from the Middle East, institutional holding of the stock is also high and the remaining 10 per cent is public holding. The one time settlement has taken place with the debtors & an investor from the Middle East has inducted a 32 per cent stake at Rs 185 and following the acquisition an open offer was made at Rs 195. The company has re-scheduled its loans and the present net consolidated debt in the books of accounts is around 850 crore. There core business is doing very well with top line of 1000 crore and although its profitability needs to be improved. While looking at their business portfolio, IL&FS have stakes in many infrastructure projects such as bridges, rail, roads, infrastructure, power projects etc.

“Bell the bull says : IL&FS Engineering can be considered as a good buy for investors who are willing to invest for a period of 12 months and above. The price may move back to Rs 160-180 within 1 year of time.”

 

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