Neutral IRB Infrastructure; target of Rs 270: Motilal Oswal

Motilal Oswal's research report on IRB Infrastructure

IRB Infrastructure (IRB)’s revenue grew 18% YoY to INR19.3b in 1QFY23. It included INR4.2b of claims received from NHAI towards its Pathankot Amritsar BOT project. Adjusted for this, revenue was lower by 7% YoY.  EBITDA grew 52% YoY to INR10.6b. EBITDA was flat YoY when adjusted for the INR3.7b benefit towards claims received in Pathankot Amritsar BOT project. APAT surged to INR3.6b in 1QFY23. Adjusted for claims benefit totaling INR2.7b, APAT grew 30% YoY in 1QFY23. IRB is seeing strong opportunity in BOT/TOT projects and would also be open to bid for HAM projects. The company recently received financial closures for two BOT projects and has also tied up funding for the Ganga Expressway project. As these projects move into execution, the revenue would pick up in FY23/24E. Toll revenue is also likely to witness strong growth with improving traffic and tariff increase.

Outlook

We raise our revenue estimates by 4%/5% for FY23/24 with improved outlook. We maintain our Neutral rating with an SoTP-based TP of INR270.

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