Emkay Global Financial Services has maintained its buy rating on IRB Infrastructure Developers with a target of Rs 137 in its November 4, 2008 research report. "IRB Q2FY09 consolidated net profit at Rs 412 million was below our estimates primarily on account of subdued performance of the construction vertical. Net revenues for the quarter at Rs 2.02 billion was below our estimates of Rs 2.11 billion."

"At current level, the stock is trading at 6.1x FY2010E earnings. We agree that in current scenario of high interest rates and moderating economic growth IRB stock is unlikely to outperform. However we take comfort from the fact that post financial closure of Surat Dahisar project, the company will not require significant funds for executing its projects. The CMP of Rs 84 is factoring in excessive pessimistic scenario of cost of equity higher than 15% and interest rates upwards of 13% to remain throughout the life of the projects. We maintain our BUY recommendation on the stock with a revised price target of Rs 137," says Emkay Global Financial Services' research report.

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