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G. Madhan

FRESH investment can be considered in the stock of IVRCL Infrastructures and Projects. The stock, which trades at 45 times its expected FY'05 earnings, is attractively valued. IVRCL derives its strength from water supply projects that offer higher margins. As these account for 62 per cent of the current order book of about Rs 1,600 crore, it augurs well for earnings growth.

Demand for IVRCL's services is likely to exhibit a firm trend, given the Government's thrust on irrigation and infrastructure projects, especially roads and water supply projects.

IVRCL has pre-qualified for projects worth Rs 18,000 crore. It has also bid for projects worth Rs 2,137 crore, 42 per cent of which are water supply projects; the results are expected in the next two months. The company has a strike rate of about 15 per cent on its bids. The sharp rise in the prices of key inputs may not be a cause for concern as most of IVRCL's projects have an escalation clause.

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