IRB Infrastructure - Traffic growth remains sub-par; construction business supports results - Kotak

IRB reported weak BOT sales (up 8% yoy) with sedate traffic in key stretches (traffic declined in Surat Dahisar, was up 4% in Mumbai-Pune). Overall revenues (up15% yoy) and margin (45%) were in line with estimates, supported by strong construction business (sales up 18% yoy, 26% margin).

Key positive was refinancing of Surat Dahisar's Rs13 bn debt (rate lowered to 10.4% from 12% by IIFCL and later by banks).

We retain our BUY rating (revised target price of Rs170 from Rs175, primarily on roll-over) based on attractive valuations, strong asset profile, healthy balance sheet and execution track record.

Source : Equity Bulls

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