IL&FS; Transportation Networks (ITNL) consolidated revenues for 2QFY2016 were up 24.7% yoy to Rs1,872cr, reflecting a 38.7% increase in Construction business income to Rs1,223cr. During the quarter, ITNLs revenues benefitted from Rs135.6cr of compensation claim. On adjusting for the same, adj. revenues were up 15.6% yoy to Rs1,736cr. Higher contribution from the low margin Construction business led to a 578bp yoy decline in EBITDA margin to 35.2%. Despite a 7.1% yoy EBITDA growth, higher interest and depreciation expenses led to a 30.1% decline in PAT to Rs69cr. On adjusting for compensation claims, ITNL would have reported adj. losses of Rs66cr. ITNL reported an order backlog of Rs15,023cr at 2QFY2016-end, which gives revenue visibility for the construction segment for over the next 36 months. The consolidated debt stood at Rs26,213cr, reflecting a D/E ratio of 4.5x (vs. D/E ratio of 3.7x at 2QFY2015-end, when debt stood at Rs21,177cr). ITNLs incremental equity requirement towards BOT projects for the next 2-3 years is at ~Rs495cr. 8 of the ongoing BOT projects are expected to report Date of Completion (CoD) in the next 12 months, in-turn contributing to FY2016-17E Toll/ Annuity Income. Outlook and Valuation: Despite ITNLs robust order backlog and strong execution capabilities,...