IRB Infrastructure Q3 profit seen down 7% to Rs 122 cr

IRB Infrastructure is set to announce its third quarter results on Wednesday. Analysts on an average expect profit after tax of the company to fall by 6.9 percent year-on-year to Rs 122 crore in the December quarter due to higher interest and depreciation cost, according to CNBC-TV18 poll.

Net sales are seen going up by 17.5 percent to Rs 876 crore from Rs 745 crore during the same period due to 10 percent rise in EPC revenues and 6 percent increase in BOT (build-operate-transfer) revenues. According to analysts, increase in toll rates in some of company's key projects will add further upside to the topline.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 14.7 percent YoY to Rs 392 crore.

Meanwhile, EBITDA margin is seen falling 110 basis points YoY to 44.7 percent in October-December quarter, impacted by higher proportion of construction revenues (which is low margin business).

Analysts say overall performance of the company is expected to be a mixed bag.

Both EPC & BOT segments are expected to do well. According to analysts, revenue growth in BOT segment will be on account of increase in toll rates on Tumkur - Chitraguda, Surat - Dahisar and Bharuch - Surat projects.

Surat - Dahidar project saw a hike of 8.9 percent in toll rates from September 1, 2012.

Analysts feel depreciation will be higher YoY due to completion of Surat - Dahisar project while interest cost is expected to increase 10 percent YoY.

Blended tax rate for the quarter is expected to be around 25 percent.

Investors should watch out for progress on Ahmedabad-Vadodara project; government approval for toll collection at IRDP Kolhapur project; and traffic growth at road projects.

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