IRB Infrastructure (Best play on safest infra assets, BUY): IIFL

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IRB Infrastructure (Best play on safest infra assets, BUY): 


Demonstrated capability to generate peer-beating returns in BOT assets and strong execution with minimal outsourcing makes IRB the best play on India’s road expansion programme. We initiate with target price of Rs267, with two-thirds being contributed by stable cash flows from existing asset portfolio. Projects in hand would drive 32% EBITDA CAGR over FY10-13ii. Recent hiatus in award activity is actually a boon in disguise. Cash flows in the interim enhance capability to pursue larger number of projects in the next round without the need to dilute. A ~20% correction last month, driven by unwarranted concerns provides an attractive opportunity. We initiate coverage with BUY.