JP Morgan has assigned Overweight rating on Reliance Infrasture with Dec-13 target price of Rs 600, implying 20% upside potential from current levels.

It foresees a spate of positive newsflow for Reliance Infrastructure as it enter 2013, mainly around  commissioning  of under  construction  projects.  This  should revive investor confidence in the company's execution capabilities.

Reliance Infra has a well diversified  infrastructure portfolio across regulated power  businesses, EPC, BOT assets (road, metro and transmission) and is foraying into cement manufacturing.

The company has the least levered balance sheet (FY12 consol D/E of 0.75x)  among India infrastructure conglomerates under our coverage and is well  placed  to benefit from a policy-led revival in capex cycle sentiment.

Commissioning of projects in 2013 could boost investor confidence in RInfra's execution capabilities. Projects to start operation shortly are Delhi Metro restart, Sasan 1st unit, Mumbai Metro Line 1 (7 kms), WRSS, and 2 new road projects (will have 10 road projects operational)

It forecasts 26% EBITDA growth in FY14, led by favorable contribution from newly commissioned projects; further delays in CoD pose downside  risk  to  earnings.  It assumes re-consolidation of Delhi Airport Express in FY14 - this and high capital cost in early ramp-up phase of infra projects results in PAT de-growth of 6%.

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