IL &FS Engineering and Construction is one stock I suggested as a BUY @ Rs.98 which is currently trading 15 % below the suggested price. Yesterday company announced the receipt of an order worth Rs. 326.99 Crores from Bangalore Metro Rail Corporation Limited. ( Link HERE) .Currently company's total order book is around Ten Thousand Crore which giving very good visibility for future. Recently one visual media interpreted the revision of project cost of one of their projects as a 'Scam' and I received lot of queries from my readers to express my opinion about the company post this event. To my understanding , this is one project originally awarded to a consortium of Maytas infra and Gayatri Projects .( Later Maytas changed its name to IL&FS Engg when the control of company fully transferred to the hands of IL&FS .( IL &FS is promoted by Housing Development Finance Corporation Limited (HDFC) ,Central Bank of India (CBI), Unit Trust of India (UTI), State Bank of India, Life Insurance Corporation of India, ORIX Corporation - Japan and Abu Dhabi Investment Authority). Due to time overrun for the completion of the said project , as per terms and conditions , company succeeded in re-negotiating the project cost and this is interpreted as a 'Scam' by a media . I believe , such project cost revisions are not unusual and there is nothing wrong in it if the terms and conditions are framed in a manner with a provision to do that . Unfortunately , to give the colour of a 'scam' to this incident ,visuals of Raju( Satyam) shown repeatedly in the said news even though this company is not even owned by him at present but owned by reputed PSU banks and institutions .
As you are aware , IL&FS Engineering is currently working on many prestigious projects including India's First smart City (Gujarat International Finance Tec-City (GIFT) .Still this is my first choice from this sector and reiterating a BUY at CMP Rs.84 with a long term view.
Link - India’s first smart city takes shape in GIFT