Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IRB Infrastructure – Company update
We recently met the management of IRB Infrastructure (IRB) to get more clarity on the
recent developments at the NHAI’s front – PMO intervention leading to the increase in
overall targets for FY2012; the company’s future bidding strategy – in light of the
enhanced number of players in the road segment and with one large project already won;
and the reasons for the stock’s underperformance.
NHAI to double project awarding in FY2012: NHAI has begun FY2012 on an aggressive
note by awarding projects of ~481kms in April 2011 and targets ~1,326km for May and
June. This is in line with NHAI’s revised target of ~11,000kms for FY2012, an increase of
whopping 117% over FY2011. IRB being one of the market leaders is expected to gain
from the same.
With order inflow target met, timely execution is the key: With the bagging of the
Ahmedabad Vadodra project at the beginning of the year, IRB nearly achieved its yearly
target of order inflows. Accordingly, it is now focusing on the execution of projects. Hence,
management has guided for aggressive ramp-up of its under-construction portfolio and is
aiming at the early completion of these projects. We believe IRB is well placed for this,
given the in-place integrated business model (in-house construction arm) and quantum of
work in hand (order book: `11,741cr).
Recent fall in the stock leads to undemanding valuations: IRB is one of the few Indian
companies that offer investors the opportunity to participate in the inevitable rise in India’s
investments in the road sector. However, the stock has declined by 12.2/24.3% over the
last three/six months due to concerns over 1) aggressive bidding; 2) rising competition;
and 3) increasing interest rates. Though these concerns are legitimate, we believe this huge
decline in the stock price is unwarranted. We have outlined the value erosion due to these
factors and contemporary loss of market cap and deem that this fall has created an
opportunity for long-term investors by bringing the stock to undemanding valuations.
Hence, we recommend Buy on the stock with target price of `191.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IRB Infrastructure – Company update
We recently met the management of IRB Infrastructure (IRB) to get more clarity on the
recent developments at the NHAI’s front – PMO intervention leading to the increase in
overall targets for FY2012; the company’s future bidding strategy – in light of the
enhanced number of players in the road segment and with one large project already won;
and the reasons for the stock’s underperformance.
NHAI to double project awarding in FY2012: NHAI has begun FY2012 on an aggressive
note by awarding projects of ~481kms in April 2011 and targets ~1,326km for May and
June. This is in line with NHAI’s revised target of ~11,000kms for FY2012, an increase of
whopping 117% over FY2011. IRB being one of the market leaders is expected to gain
from the same.
With order inflow target met, timely execution is the key: With the bagging of the
Ahmedabad Vadodra project at the beginning of the year, IRB nearly achieved its yearly
target of order inflows. Accordingly, it is now focusing on the execution of projects. Hence,
management has guided for aggressive ramp-up of its under-construction portfolio and is
aiming at the early completion of these projects. We believe IRB is well placed for this,
given the in-place integrated business model (in-house construction arm) and quantum of
work in hand (order book: `11,741cr).
Recent fall in the stock leads to undemanding valuations: IRB is one of the few Indian
companies that offer investors the opportunity to participate in the inevitable rise in India’s
investments in the road sector. However, the stock has declined by 12.2/24.3% over the
last three/six months due to concerns over 1) aggressive bidding; 2) rising competition;
and 3) increasing interest rates. Though these concerns are legitimate, we believe this huge
decline in the stock price is unwarranted. We have outlined the value erosion due to these
factors and contemporary loss of market cap and deem that this fall has created an
opportunity for long-term investors by bringing the stock to undemanding valuations.
Hence, we recommend Buy on the stock with target price of `191.
No comments:
Post a Comment