Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
EARNINGS REVIEW
IRB Infrastructure Developers (IRBI.BO)
Buy Equity Research
Below expectations despite impressive toll growth; Buy
What surprised us
IRB infrastructure reported net income of Rs 1,330 mn (up 45% yoy) which
was 16% above Bloomberg consensus and 11% below our estimates.
Revenue for the quarter at Rs 6,688 mn (yoy growth of 54%) was 15%
below our and 5% below street estimates because billing for construction
on new projects seemed lower than anticipated. EBITDA margin came
under pressure this quarter primarily because of a significant
increase in contract expenses.
The company’s order book as of 3QFY11 end is at Rs 90bn vs. Rs 95bn as
of 2QFY11 - down 5% as no new order wins have been booked in past 3
months.
What to do with the stock
With financial closure achieved on 3 of the 4 recently won projects, we
expect a continuous contribution from construction billings on at least
three of these projects, driving a sales CAGR of 42% over FY2011-12E and
a net income CAGR of 28% over the same period. On the back of below
expectation construction revenue in 3Q, we partially shift our construction
revenue estimates by one quarter resulting in a decline in revenue by 4%-
7% for FY11E-13E and consequently a decline in our EPS by 1%-3%. This
drives our change in our SOTP based TP to Rs 295 (from Rs 315 earlier) –
we retain our Buy rating. The stock currently trades at FY12E P/B of 2.3X at
a slight discount to its historical 12-month forward P/B of 3X.
Key risks: 1) Lower-than-expected traffic growth, 2) Volatile construction
material costs, 3) Unfavorable regulatory and macro environment
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
EARNINGS REVIEW
IRB Infrastructure Developers (IRBI.BO)
Buy Equity Research
Below expectations despite impressive toll growth; Buy
What surprised us
IRB infrastructure reported net income of Rs 1,330 mn (up 45% yoy) which
was 16% above Bloomberg consensus and 11% below our estimates.
Revenue for the quarter at Rs 6,688 mn (yoy growth of 54%) was 15%
below our and 5% below street estimates because billing for construction
on new projects seemed lower than anticipated. EBITDA margin came
under pressure this quarter primarily because of a significant
increase in contract expenses.
The company’s order book as of 3QFY11 end is at Rs 90bn vs. Rs 95bn as
of 2QFY11 - down 5% as no new order wins have been booked in past 3
months.
What to do with the stock
With financial closure achieved on 3 of the 4 recently won projects, we
expect a continuous contribution from construction billings on at least
three of these projects, driving a sales CAGR of 42% over FY2011-12E and
a net income CAGR of 28% over the same period. On the back of below
expectation construction revenue in 3Q, we partially shift our construction
revenue estimates by one quarter resulting in a decline in revenue by 4%-
7% for FY11E-13E and consequently a decline in our EPS by 1%-3%. This
drives our change in our SOTP based TP to Rs 295 (from Rs 315 earlier) –
we retain our Buy rating. The stock currently trades at FY12E P/B of 2.3X at
a slight discount to its historical 12-month forward P/B of 3X.
Key risks: 1) Lower-than-expected traffic growth, 2) Volatile construction
material costs, 3) Unfavorable regulatory and macro environment
No comments:
Post a Comment