GMR Infrastructure - Mgmt confident of Ahd-Kishangarh delivering value:Emkay,

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GMR Infrastructure

Mgmt confident of Ahd-Kishangarh delivering value

BUY

CMP: Rs26                                        Target Price: Rs38

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n     Management expects Ahmedabad – Kishangarh project to deliver 24% equity IRR, driven by traffic growth expectation of 8% CAGR for 26 years v/s our base case of 5.7% for DMIC

n     FY13-16E toll rev CAGR of ~23% looks optimistic - Normal traffic growth est of 7% in initial yrs, yields us equity IRR of 12%. Toping up EPC margins could drive IRR to 15%

n     Male airport hold promise with its ability to internally fund equity.  ~80% of revenues comprise of fuel trade driving the near term profitability. Real estate opportunity at 37 acres

n     Maintain BUY rating PT Rs 38 offers 46% upside from the current market price. Peaking interest rates cycle will be the key drivers of value in the near term