RESEARCH CALLS: India Infoline

Prabhudas Lilladhar has given an 'outperformer' rating for India Infoline with a price target of Rs 220 as Prabhudas believes that the company has shown phenomenal growth in past quarters and is expected to continue with same momentum in the future.

India Infoline is ramping up its distribution network. The company currently has 233 branches and plans to set up 350 by FY07. While this investment is imperative from a longer-term view, near term it will impede earnings progression.

The company has significant exposure in retail equity broking and with the expansion in its networth it is expecting empanelment from Institutional clients as well.

India Infoline plans to increase its non-equity income contribution from current levels of 33 per cent to 38 per cent and 46 per cent by FY07 and FY08 respectively.

An earnings growth of 80 per cent and 35 per cent in FY07 and FY08 respectively is expected. At the current price of 193.3, the stock is quoting at 12.39 times FY07E and 9.16 times FY08E "� in line with the international broking firms.

IVRCL Infrastructure

FINQUEST Securities recommends a 'buy' on IVRCL Infrastructure with a target price of Rs 342. IVRCL has a robust order book of Rs 6,900 crore with an execution cycle of approximately 22 months.

The company has good amount of orders in the water segment in which it has expertise. It has a well diversified portfolio spread across road, building and power segment. IVRCL has secured big orders in the growing road segment.

All these orders are under BOT schemes giving an IRR in excess of 20 per cent. The company is also participating and winning orders in the up coming power sector. IVRCL has off late participated in the real estate boom and is constructing good number of buildings in prime locations.

It has an existing land bank at prime locations, thereby reducing the risk of spiralling real estate prices. Finquest conservatively expects the company's revenues to grow at a CAGR of 43 per cent and profits by 53 per cent over FY06-08E. At the current priceof Rs 282, on core business valuation the scrip trades at 24.34 times its FY07E and 17.8 Eearnings.