India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Initiating Coverage report on IRB Infrastructures Developer Ltd., Leading private road developer.
IRB Infrastructure Developers Ltd. (IRB), incorporated in 1998, is one of the largest and most experienced road BOT player in the country with total length of around 5,735 lane km of road projects under its portfolio. IRB continues to play a bigger role on the increasing demand from the recent infrastructure thrust to develop Roads, National Highways, Bridges and Tunnels in India. This road toll operator with daily cash collection of around `2.6Cr from its 10 operating projects has 9.3% stake in golden quadrilateral. The company also has in-house EPC division which does EPC work for its own road projects. The company has presence in four business verticals, namely BOT, EPC, airport development and real estate development. Out of these four verticals, two-business verticals namely EPC and BOT contribute 60% and 40% to the revenues respectively. The other two verticals (airport development and real estate development) are at a very nascent stage.
Executive Summary
Ø Robust order of `9506Cr to drive revenue visibility: The Company's order book consists of EPC & ongoing BOT projects worth `4491Cr, O&M worth `2315Cr, funded project worth `30Cr and BOT which are under award worth `2670Cr.
Ø Operational debt free projects: The Company generates revenues of around `0.7Cr per day as on 30th September, 2010 from the six debt free projects.
Ø Project selection approach- A key strategy: The company has adopted strategy to bid for larger projects rather than competing with smaller players by negotiating margins. It targets to bid for more than 1000km of road in a year in next 2-3 years.
Ø New norms initiative by government to highly benefit: Currently, IRB has only one order in pre financial closure stage. Hence, according to the new norms, it qualifies to bid and raise money for new projects.
Valuations
Considering the growth and execution capabilities, we expect the company's revenue to grow at 47.2% and 52.0% for FY11E & FY12E respectively. Based on the SOTP valuation, we recommend a 'buy' on the stock with the target price of `284.60 per share for one year period, subject to change.
No comments:
Post a Comment