Wednesday, 11 January 2017

REPORT ON IVC ....... Why we picked as Hidden Gem?


IL&FS Investment Managers Limited (IVC), a subsidiary of Infrastructure Leasing & Financial Services Limited (IL&FS), is one of the oldest and largest private equity fund managers in India, with over $ 3.2 bn under management. 

Established in 1989, IVC has been an early and in many instances, the first investor across various sectors such as Telecom, City Gas Distribution, Shipyards, Retail, and Media. Funds managed by IVC now span General Purpose Private Equity, Real Estate and Infrastructure.

Investors to IVC managed Funds include most of the major Indian Banks & Institutions, and marquee Global Institutional Investors including major U.S. Pension Funds, Endowments and Foundations.

IVC is listed on the National Stock Exchange and The Bombay Stock Exchange.


MARKET CAP (RS CR)
487.38 
P/E
10.08
BOOK VALUE (RS)
12.65
DIV (%)
60.00%
INDUSTRY P/E
27.74
EPS (TTM)
1.54
DIV YIELD.(%)
7.73%


When you look at the yield curve for the entire scenario, it is now getting smoothened. That means, our experience shows that the high dividend yield stocks get re-rated very fast when there is a likely possibility of aggressive rate cuts. With the smoothening of curve, it is confirmed. With this particular strategy, we are focusing on high dividend yield stocks and IVC fits this particular bill. The current dividend yield roughly works out to be 8 percent, which is very attractive giving post tax return of 8 percent and we are working with a target of Rs 25-30. There are a lot of fundamentals that are attached to the company apart from the dividend yield attractive preposition. First of all, this is a very strong management and the company has been doing well even during tough times. They have been able to consistently give you dividend of Rs 1.5 for last three-four years. If you see the history of this particular company it has rewarded its shareholders very handsomely. From a fundamental aspect, the quality and the fortune of this company is directly correlated with the growth of the economy. The investments they have done into the logistic sector or construction sector or Special Economic Zones (SEZs) warehousing will do well once the economy revives. We are forecasting a better economy for next year. We feel this is one stock, which fits the bill from this angle too. Another important thing is the investments they have been able to exit. They are the private equity investors and they are also managing USD 3.2 billion of funds so they are getting a streamline of cash flows, which is consistent and will end up with the same earning per share (EPS) even for next year even if a topsy-turvy situation arise for the economy. With a strong parentage, we feel the stock could easily be re-rated by 40-50 percent from next six-twelve months perspective because of the dividend yield, yield curve smoothening and the fundamentals attached with the economy.   We feel by Budget, there will be a lot of investments or expectations built-up into sectors like power, infrastructure and this are a close proxy of investment with a very good management.



4 comments:

  1. Sir do you have any WhatsApp group??

    ReplyDelete
  2. Got killed!
    this & Il&fs engineering too.
    atleast ivc showed some upmove but il&fs engineering was a downward journey. finally booked losses in both, my bad luck

    ReplyDelete