Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IRB Infrastructure: O n t h e g r o w t h r o a d …
IRB Infrastructure (IRB), one of the leading players in the road space,
currently has a road BOT project portfolio of 16 projects aggregating
5,735 lane km (3413 lane km are operational while the remaining are
expected to get operational till FY14E). Once operational, IRB’s BOT
revenues would expand 2.2x to | 1604 crore in FY14E. IRB is also
comfortably placed in terms of funding requirement (all projects have
achieved financial closure and internal accruals are more than sufficient to
fund equity commitment). In the construction business, a strong and
financially closed captive order book provides healthy revenue visibility.
Given its leadership position in road development, comfortable funding
position and strong construction division providing revenue visibility, we
are initiating coverage on IRB with a BUY recommendation and a price
target of | 216.
Leading road BOT player
IRB is one of the largest BOT toll operators with 16 projects under its
portfolio covering 5,735 lane km. Out of this, 3413 lane km are
operational, generating net daily BOT collection of | 2.3 crore per day
(highest among leading players). Once all projects get operational, we
anticipate IRB’s net daily BOT collection would increase to | 4.5 crore in
FY14E translating into two fold jump in BOT revenues to | 1604 crore in
FY14 from | 721 crore in FY10.
Comfortable funding situation
IRB has achieved financial closure for all projects. In terms of equity
commitment, we believe IRB’s internal accruals from BOT and
construction division (| 3652 crore during FY11-14E) are more than
sufficient to fund its equity commitment (| 2215 crore) during FY11-14E.
In house construction capabilities
IRB, through its subsidiary Modern Road Maker (MRM) undertakes inhouse construction work. MRM currently has a strong order book of |
8,986 crore, 3.6x FY11E consolidated revenues providing strong visibility.
Furthermore, we derive comfort in execution as all of its BOT projects are
now financially closed.
Valuations
At the CMP, the stock is quoting at 12.3x FY12 EPS and 2.1x FY12 P/BV.
We are initiating coverage on IRB with a BUY recommendation and price
target of | 216 based on SOTP valuations. We have valued IRB’s BOT
project at | 143/share (operational project – | 95/share and under
construction/development project – | 48/share) and construction business
at | 70/share (at 9x FY12 EPS).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IRB Infrastructure: O n t h e g r o w t h r o a d …
IRB Infrastructure (IRB), one of the leading players in the road space,
currently has a road BOT project portfolio of 16 projects aggregating
5,735 lane km (3413 lane km are operational while the remaining are
expected to get operational till FY14E). Once operational, IRB’s BOT
revenues would expand 2.2x to | 1604 crore in FY14E. IRB is also
comfortably placed in terms of funding requirement (all projects have
achieved financial closure and internal accruals are more than sufficient to
fund equity commitment). In the construction business, a strong and
financially closed captive order book provides healthy revenue visibility.
Given its leadership position in road development, comfortable funding
position and strong construction division providing revenue visibility, we
are initiating coverage on IRB with a BUY recommendation and a price
target of | 216.
Leading road BOT player
IRB is one of the largest BOT toll operators with 16 projects under its
portfolio covering 5,735 lane km. Out of this, 3413 lane km are
operational, generating net daily BOT collection of | 2.3 crore per day
(highest among leading players). Once all projects get operational, we
anticipate IRB’s net daily BOT collection would increase to | 4.5 crore in
FY14E translating into two fold jump in BOT revenues to | 1604 crore in
FY14 from | 721 crore in FY10.
Comfortable funding situation
IRB has achieved financial closure for all projects. In terms of equity
commitment, we believe IRB’s internal accruals from BOT and
construction division (| 3652 crore during FY11-14E) are more than
sufficient to fund its equity commitment (| 2215 crore) during FY11-14E.
In house construction capabilities
IRB, through its subsidiary Modern Road Maker (MRM) undertakes inhouse construction work. MRM currently has a strong order book of |
8,986 crore, 3.6x FY11E consolidated revenues providing strong visibility.
Furthermore, we derive comfort in execution as all of its BOT projects are
now financially closed.
Valuations
At the CMP, the stock is quoting at 12.3x FY12 EPS and 2.1x FY12 P/BV.
We are initiating coverage on IRB with a BUY recommendation and price
target of | 216 based on SOTP valuations. We have valued IRB’s BOT
project at | 143/share (operational project – | 95/share and under
construction/development project – | 48/share) and construction business
at | 70/share (at 9x FY12 EPS).
No comments:
Post a Comment