Citi in a research note said - Mid cap construction stocks had a poor run in FY12. Revenue growth continued the downward spiral, EBITDA margins declined by 118-204bps, debt shot up and interest costs depressed PAT margins to the lowest in a decade.
For IVRCL Citi said,
It cut estimates by 36%-48% for FY13/14E on lower margins and increased interest cost. We cut our TP to Rs45 (from Rs48) to reflect 1) lower earnings estimates, 2) increase in our target multiple to 7x Sept13E from 6x Dec 12E on an improved order-book. We believe that current and future funding requirements will be an overhang on the stock
For NCC Citi Said,
We cut our estimates by 41%-42% for FY13E/14E driven by a cut in our revenue and margin assumptions. We increase our target multiple for the construction business to 7x Sept13E from 6x Dec12E to reflect an improvement in the order-book. We cut our values of NCC’s international and real estate business due to the lower visibility. Target price remains at Rs 53
