For 4QFY20, IRB’s reported decent set of numbers despite construction activities and toll collection coming to halt, largely impacted by the nationwide lockdown in Mar ’20 and Covid-19. However, with partial lifting of lockdown, the company resumed its construction activity at all its sites. Further, toll collection has reached ~70% pre-covid levels in June’20 led by pent-up demand and pick-up in economic activity. To manage cash flow mismatch due to Pandemic, IRB have availed moratorium (relief given by government) on its loans till Aug '20 for its BOT portfolio, post which it expects to be able to service its debt from the rising toll revenues.
OutlookIRB Infrastructure is one of the largest BOT toll operators in the country having market share of ~22% in the total Golden Quadrilateral projects with over 3,700km of total projects successfully executed. At CMP, the stock trades at a P/E of 8.7x/3.2x on FY21E/FY22E EPS and is trading at an EV of 10.2x/8.9x FY21E/FY22E EBITDA. We maintain BUY rating on the stock with revised TP of Rs139 (earlier TP of 127).
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