IRB Infrastructure eyes 20% jump in order book in 2023-24

Along with the growth in IRB Infra's assets, its toll collections are expected to rise 10-12 percent in 2023-24.

IRB Infrastructure Developers expects its current order book of Rs 21,000 crore to jump up around 20 percent in 2023-24 to around Rs 25,000 crore.

The current order book for IRB Infra stands at Rs 21,000 crore, including Rs 9,000 crore for engineering, procurement, and construction (EPC), and Rs 12,000 crore for operational and management (O&M) projects.

"We have today Rs 21,000 crore of order book and as per the strategy of the company, we will try to bag 20 percent higher order book than what we are consuming. For FY’24, we will try to bag around Rs 5,000 to Rs 7,000 crores worth of order book," Anil Yadav, Director, IRB Infrastructure told Moneycontrol.

Last month IRB Infra was selected as the preferred bidder for the Rs 2,132 crore build-operate-transfer or BOT project in Gujarat.

Going forward in 2023-24, the company will look to prioritise BOT projects that will be executed through the company's private Infrastructure Investment Trust (InvIT).

Yadav added along with the growth in IRB Infra's assets, its toll collections are expected to rise 10-12 percent in 2023-24.

“If GDP grows at 6-7%, a similar kind of run-rate growth we can expect in the traffic as well. So, both tariff and traffic put together, I think 10 to 12% kind of growth we can easily expect on the toll revenue,” said Yadav.

IRB Infra is looking to prefer acquiring BOT projects in the road segment due to lower competition in the segment when compared to EPC projects and hybrid annuity model (HAM) projects.

The highway major expects the government to come out with more BOT projects in 2023-24 as there is renewed interest in the segment after the government changed the model concession agreement of these contracts.

The government putting a cap on the market borrowing of the National Highways Authority of India (NHAI) for 2023-24 is also an indication that more BOT projects will be awarded next year.

"If you look at the very recently awarded BOT project, which was between Samakhiyali and Santalpur in the state of Gujarat, there were almost six bidders that had submitted bids. This indicates that there is an increase in interest of private participation in BOT projects," Yadav said.

Currently, the IRB group handles 23 assets including 18 BOT projects, 4 HAM projects,s and one toll operate transfer (TOT) asset of aggregate size of more than Rs 62,000 crore and 12,000 km.

Despite the slowdown in the construction and awarding of national highways projects in the country seen in 2021-22 and 2022-23, IRB Infra is confident the government will come out with more projects in 2023-24 and unbuckle the trend of a slowdown in the road sector.

IRB Infra reported a 94.49-percent jump in its consolidated net profit to Rs 141.35 crore for the quarter that ended December 31, 2022. Its total income during October-December 2022 rose to Rs 1,570 crore, from Rs 1,497.78 crore in the year-ago period. The firm's expenses fell to Rs 351.72 crore from Rs 1,280.22 crore.