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Research
IRB Infrastructure - 4QFY2012 Result Update - Angel Broking
Posted On : 2012-05-12 10:39:08( TIMEZONE : IST )
For 4QFY2012, IRB Infrastructure (IRB) reported a modest set of numbers. The company's revenue came in-line with expectations, but owing to better-than-expected performance at the EBITDAM level, earnings were higher than estimates. IRB has decided to acquire 100% stake in an operational (COD August 2009) Omallur Salem Namakkal BOT road project (69 km) in accordance with its strategy to grow inorganically. As per the company, equity IRRs in new road project wins are worth 16-18%, owing to aggressive competition witnessed in the road sector. Hence, the company has acquired an operational BOT project where IRB is expecting equity IRRs of ~21%. Prima facie the acquisition looks positive for the company.
Result marginally ahead of expectations: IRB's top line witnessed growth of 10.6% yoy to Rs.848cr, marginally ahead of our estimate of Rs.829cr on the back of maintaining healthy execution pace for under-construction projects. The E&C segment's revenue grew by 8.0% yoy to Rs.625cr and the BOT segment witnessed 21.3% growth to Rs.257cr. However, Surat Dahisar and Bharuch Surat are expected to face muted traffic growth for the next one year, owing to traffic diversion. On the EBITDAM front, IRB's margin came in at 44.9%, higher than our estimate of 42.2%. Depreciation came in at Rs.102cr, in-line with our estimate. Interest cost came in at Rs.150cr, registering a jump of 7.3%/5.6% on a yoy/qoq basis. At the earnings front, IRB reported growth of 17.1% to Rs.120cr, above our estimate of Rs.104cr on account of better-than-expected performance on the EBITDAM front.
Outlook and valuation: IRB has a robust order book of Rs.6,467cr (2.8x FY2012 E&C revenue, excluding O&M orders), which lends revenue visibility. For FY2013, NHAI has a target of 8,800km, which it intends to award during the year. This is likely to translate into ~Rs.80,000cr plus opportunity for developers. IRB is currently pre-qualified to submit bids for projects worth Rs.36,000cr and is targeting order inflow of Rs.3,000cr-4,000cr over FY2013. Hence, we maintain our Buy view on the stock with a target price of Rs.166.
