Buy IRB Infrastructure; target of Rs 153: KRChoksey

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26 Aug, 2025 12:21

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KRChoksey`s research report on IRB Infrastructure Developers

"IRB Q4FY13 PAT Rs 151.2 crore (vs. Est Rs 141 crore) is above to expectations primarily led by lower taxes (-986 bps, YoY). Construction segment grew by 9.3 percent, YoY due to better performance in upcoming projects, Toll revenue grew by 6.9 percent, YoY including revenue from Ahmedabad-Vadodara Road project. EBITDA grew to Rs 422 crore (+11 percent, YoY) and margins are flat -33 bps on YoY. Traffic growth in Surat-Dahisar, Bharuch-Surat and Mumbai-Pune grew by 5 percent-7 percent led to increase in Toll revenue by 10 percent, YoY for Q4FY13. Toll on Ahmadabad- Vadodara is commenced (Rs 30 lacs per day) from 1st January, 2013. Traffic in Tumkur-Chitradurga fell due to iron ore mining issues.”

“EPC work on Talegaon-Amravati and Jaipur-Deoli is almost 95 percent completed and expected to collect toll in next 2 quarters. However, Amritsar-Pathankot and Tumkur-Chitradurga has completed 80 percent & 75 percent work respectively. EPC work is also in swing at Ahmedabad-Vadodara, it contributes Rs 240 crore in March quarter. Further, in H2FY14E, Goa-Kundapur will commence EPC work will increase EPC revenue in FY14E.  IRB’s EPC order book currently stands at Rs 84.3 bn, providing 3.1x revenue visibility to FY13 EPC revenue, which in our view is a comfortable level. Further management highlighted that EPC margins in this quarter (27 percent) were supported by lower raw material prices. Management expects more projects to be awarded by NHAI in FY14E as environment and forest clearance issues get resolved.”

“We maintain our BUY rating on IRB with a target price of Rs 153, however we expect the recent concerns related to management will stay in short terms. We recommend “BUY” on IRB with TP of Rs 153 based on 1.) having best operating cashflow of Rs 15 bn in the construction industry, 2.) strong balance sheet to grab upcoming opportunities in the road sector,” says KRChoksey research report.  

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