Accumulate IRB Infra; target of Rs 182: Angel Broking

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Accumulate IRB Infra; target of Rs 182: Angel Broking

Angel Broking is bullish on IRB Infra and has recommended accumulate rating on the stock with a target of Rs 182 in its January 30, 2012 research report.

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Angel Broking is bullish on IRB Infra and has recommended accumulate rating on the stock with a target of Rs 182 in its January 30, 2012 research report.

"For 3QFY2012, IRB reported a decent set of numbers, which were above our and street estimates, led by better execution of under-construction projects and high E&C margins. IRB has a robust order book of Rs7,070cr (4.2x FY2011 E&C revenue, excluding O&M orders), which lends revenue visibility. We have revised our estimates upwards for FY2012 to factor in pickup in execution before our expectations. We retain our estimates for FY2013 as we were already expecting pickup in execution from 4QFY2012."

"IRB's top line witnessed modest growth of 11.5% to Rs745.5cr, ahead of our estimate of Rs639.5cr, owing to higher-thanexpected E&C income from under-construction projects (Jaipur Deoli - ~Rs180cr, Talegaon Amravati - ~Rs180cr and Amritsar Pathankot - ~Rs100cr). IRB's EBITDAM came at 45.8%, in-line with our estimate of 45.9%. Interest cost stood at Rs142.0cr, registering a jump of 73.2% yoy/0.6% qoq basis, in-line with our estimates. IRB reported PAT of Rs132.0cr, higher than our estimate of Rs81.5cr on account of better show on the revenue front and lower tax provisioning (18.0% vs. our estimate of 23.2%)."

"NHAI has awarded ~4,500km of projects so far in FY2012 in the road segment; and it is expected to finish the year by awarding more than ~5,400km of projects. We believe IRB with its robust order book in hand would be concentrating more on execution in FY2013 and would be selective in bidding for projects. IRB's stock has outperformed its peers over the past few months, vindicating our top pick in the space. However, we believe IRB offers limited upside from current levels and, hence, we downgrade the stock to Accumulate from Buy with an SOTP target price of Rs182," says Angel Broking research report.   

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