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India Equity Research Reports, IPO and Stock News
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Key takeaways
About Rs20 bn of equity remains to be invested in existing projects in the portfolio of the
company. IRB invested about Rs7 bn as equity in projects in FY2011 so far. The company
would meet this requirement thought internal accruals. The management also indicated
that the company has the ability to take on new projects to the tune of about Rs40-50 bn
without the need to raise capital.
NHAI likely to award four large projects in the near-term (RFP/RFQ stage)—(1) four-laning
of Beawar–Pali–Pindwara in Rajasthan worth Rs23 bn (244 km), (2) four laning of Kota–
Darah–Jhalawar, Rajasthan worth Rs5.1 bn (88 km), (3) Rs22 bn (102 km) project in
Gujarat for six-laning of Ahmedabad-Vadodara, and (4) Rs17.5 bn (213 km) project in AP
for six-laning of Iccahpuram–Srikakulam–Anandapuram section. Management expects
NHAI projects to the tune of about 5,000 km potentially to be awarded over the next 3-4
months.
Has achieved financial closure of most projects in the portfolio except for Tumkur-
Chitradurg. Has already started execution of the Amritsar-Pathankot, Jaipur-Tonk-Deoli
and Talegaon-Amritsar projects and expects to start execution of the Panaji-Goa project in
the next month.
Likely reduction in Surat-Dahisar project cost to the tune of about Rs5-7 bn (from Rs28.4
bn to about Rs23-25 bn) based on savings on construction materials. This would help in
offsetting potential disappointment in traffic levels (toll collections of about Rs10.5 mn
per day versus estimate of about Rs11.5 mn).
Management attributed strong margins in the construction arm (of about 18-120%) to
high proportion of in-house works and strong asset base (own mining set-up, ready mix
concrete plant, hot mix plant etc.). Expects to maintain these margins level going forward
as well.
Bids for projects based on an equity IRR benchmark of about 16-20%—key assumptions
in bidding include (1) traffic growth of about 5-7%, (2) interest rate of 10-11% and (3)
cost of capital of 12%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key takeaways
About Rs20 bn of equity remains to be invested in existing projects in the portfolio of the
company. IRB invested about Rs7 bn as equity in projects in FY2011 so far. The company
would meet this requirement thought internal accruals. The management also indicated
that the company has the ability to take on new projects to the tune of about Rs40-50 bn
without the need to raise capital.
NHAI likely to award four large projects in the near-term (RFP/RFQ stage)—(1) four-laning
of Beawar–Pali–Pindwara in Rajasthan worth Rs23 bn (244 km), (2) four laning of Kota–
Darah–Jhalawar, Rajasthan worth Rs5.1 bn (88 km), (3) Rs22 bn (102 km) project in
Gujarat for six-laning of Ahmedabad-Vadodara, and (4) Rs17.5 bn (213 km) project in AP
for six-laning of Iccahpuram–Srikakulam–Anandapuram section. Management expects
NHAI projects to the tune of about 5,000 km potentially to be awarded over the next 3-4
months.
Has achieved financial closure of most projects in the portfolio except for Tumkur-
Chitradurg. Has already started execution of the Amritsar-Pathankot, Jaipur-Tonk-Deoli
and Talegaon-Amritsar projects and expects to start execution of the Panaji-Goa project in
the next month.
Likely reduction in Surat-Dahisar project cost to the tune of about Rs5-7 bn (from Rs28.4
bn to about Rs23-25 bn) based on savings on construction materials. This would help in
offsetting potential disappointment in traffic levels (toll collections of about Rs10.5 mn
per day versus estimate of about Rs11.5 mn).
Management attributed strong margins in the construction arm (of about 18-120%) to
high proportion of in-house works and strong asset base (own mining set-up, ready mix
concrete plant, hot mix plant etc.). Expects to maintain these margins level going forward
as well.
Bids for projects based on an equity IRR benchmark of about 16-20%—key assumptions
in bidding include (1) traffic growth of about 5-7%, (2) interest rate of 10-11% and (3)
cost of capital of 12%.
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