Buy IRB Infrastructure; target of Rs 288: Emkay

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26 Aug, 2025 12:21

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EBITDA Came in at Rs5.2 bn +24% YoY against our expectation of Rs5.43 bn despite miss on revenue due to higher contribution from high margin BOT business, higher E&C Margin

Revenue came in at Rs8.83 bn -6% YoY against our expectation of Rs10.3 bn , miss led by lower than expected construction revenue came in at Rs4.5 bn down 32% YoY against expectation of Rs6 bn ,E&C Margin at 30.8% versus expectation of 29%.

Traffic growth back on roads (adjusted for toll hike) with Mumbai-Pune clocking growth of 6.3%, Surat Dahisar 8.2%, Tumkur chitradurga 6.9%, Bharuch Surat 6.9%

Given its large operating portfolio, strong order backlog and moderate leverage, is best positioned to benefit from a pickup in traffic growth and execution environment Maintain Buy with the target price of Rs288/share.

"Toll revenues for the quarter stood at Rs 4.3 bn up 58% YoY in with estimate of Rs4.23 bn largely led better traffic growth seen across projects. Revenue growth at Surat Dahisar +14.2% (Adjusted for toll hike of 6%, implied traffic growth of 8.2%), Mumbai Pune +6.3%(adjusted for a tariff hike of 18% from 1st April 2014) , Bharuch Surat 6.9% (Adjusted for toll hike of 6%), Tumkur chitradurga +6.9%(Adjusted for toll hike of 6% in April -14 ). Thane ghodbunder reported revenue growth of 12.5% after two consecutive of negative traffic growth with no tariff hike in this year (last tariff hike happened in Q1FY14 of 16%).

EBITDA margin at the BOT segment surprised came in at 88.9.1% above our expectation of 86%. BOT EBITDA came in at Rs3.83 bn against our expectation of Rs3.68 bn led to overall EBITDA margin of 59% higher than expectation of Rs55%.

Given its large operating portfolio, strong order backlog and moderate leverage, is best positioned to benefit from a pickup in traffic growth and execution environment Maintain Buy with the target price of Rs 288/share", says Emkay Global Financial Services research.

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