Buy IRB Infrastructure; target Rs 188: KRChoksey

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26 Aug, 2025 12:21

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KRChoksey is bullish on IRB Infrastructure Developers and has recommended buy rating on the stock with a target price of Rs 188 in its May 10, 2012 research report.

"IRB Infrastructure Developers reported Q4FY12 consolidated revenues of Rs 848 crore (up 10.6%, YoY) that is in line with our expectation, primarily driven by higher construction income in the ongoing road projects. EBIDTA grew to Rs 381 crore (up 21%, YoY) and EBIDTA Margins improved by 388 bps YoY basis, primarily improved due to decrease in contract expenses. PAT has increased to Rs 120 crore (up 17.1%, YoY), primarily impacted by effective tax rate of 27.8% and high depreciation cost. Traffic growth at Surat-Dahisar & Bharuch-Surat fell to 0.4% & -3.1% respectively on YoY bases as traffic is diverted via Nasik due to construction of substantial flyover at Thane-Ghodbunder adjoining road. Management guided 10%-12% revenue growth for FY13E on SD road that is below average growth of 20%. Mumbai-Pune has shown traffic growth by +5% (YOY). We expect toll revenue of Rs 1285 crore (+10.9%, YoY) for FY13E."

"EPC revenue grew by 8% (YoY) and margins improved by 461 bps (YoY) on account of earthwork jobs at Tumkur Chitradurga project. We expect EPC revenue of Rs 2,500 crore for FY13E as work on sites-Tumkur & Amravati will be completed and EPC revenue from Ahmedabad-Vadodara will start in Q2FY13E. The orderbacklog of Rs 85 bn has to be executed over 2-3 years. MVR Infra, TN based road assets (68 km) is acquired by IRB for an amount of Rs 130 crore. The project has a balance concession period of 14.5 years and Rs 230 crore of debt in the balance sheet. Further, project has negative grant of Rs 100 crore and revenue sharing of 22.4% per year with NHAI. We received equity IRR of 16% with the assumption of 6% traffic growth and expect it to be valuable asset in the portfolio of IRB."

"We maintain our BUY rating on IRB with a revised target price of Rs 188 (from Rs 221) as CoE has been increased to 14% (up 100 bps) because of preliminary investigation going on against promoter’s involvement in a criminal case. Any further legal action against promoter of IRB is a risk to our target price," says KRChoksey research report.

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