¾ IL&FS Transportation networks Ltd (ITNL) will report consolidated revenues from March quarter as adoption to Ind-AS is expected to take time. Standalone revenues for the quarter were lower than our estimates. Execution during the quarter was impacted by monsoons and delay in land availability. Margins were impacted by cost overruns in most of its projects. Borrowings have moved up marginally on sequential basis and net profits were largely boosted by higher other income as core performance continued to remain weak. We maintain our Under Review rating on the company due to lack of information on consolidated financials. We believe that adoption to Ind-AS is likely to get over by March, 2017.
¾ We have witnessed progress on asset sales by the company but financial closure of projects awarded during last year is still pending. This can impact the revenue growth going forward. We thus maintain our 'Under Review' rating on the stock and would come out with a revised rating once company completes the transition to Ind-As. We believe that near term performance is likely to remain impacted on account of high leverage and execution delays.
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