Accumulate IRB Infra; target of Rs 250: Emkay

Emkay Global Financial Services has recommended accumulate rating on IRB Infrastructure with a target of Rs 250, in its November 25, 2009 research report.

“W believe IRB Infrastructure Developers, an ideal play on India’s continued focus on developing road infrastructure through PPP model, is on a verge of steep earnings growth trajectory with two of its biggest BOT projects Surat -Dahisar and Bharuch Surat contributing to revenues and earnings in FY2010. Also the construction business with existing E&C order backlog of Rs74 billion (and Rs 8 billion order from Goa - Karnataka project to be added to backlog) will fuel IRB earnings growth. Overall we expect IRB to register revenue growth of 82% and earnings growth (after minority interest) of 63% over FY2009-11E.  Also the proposed fund raising exercise will equip IRB with a war chest of Rs 65-70 billion to capitalize on huge opportunity in road BOT space in India and also significantly scale up its construction business.  Though we remain directionally positive on road BOTs in general and IRB in particular, our target of Rs 250, does not provide significant upsides. We maintain our ACCUMULATE rating on the stock with a target of Rs 250,” says Emkay Global Financial Services research report.

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