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Traction in under construction projects holds key…
IRB Infra reported healthy Q2FY12 numbers led by strong construction
segment performance. The margin at 43.7% vs. our estimates of 41%
was better owing to stronger construction segment margins at 23%
against our estimates of 21%. With the Surat Dahisar project completed,
we await traction in under construction projects, which should drive
revenue growth. We maintain BUY with SOTP price target of | 209/share.
ƒ Healthy Q2FY12 numbers driven by construction segment show
IRB’s topline grew 50.1% YoY to | 735.9 crore on account of strong
execution in the construction division. The overall margin at 43.7% was
above our expectation as the construction segment margin was at 23%
vs. our estimates of 21%. Nonetheless, PAT at | 110.1 crore was
marginally above our expectation despite strong operating profit growth
due to a sharp rise in interest expenses of |141 crore. Interest expenses
were higher due to forex losses of |14 crore.
ƒ Surat Dahisar & Kolhapur IRDP completed, awaits certificate…
The Surat Dahisar & Kolhapur project has been completed substantially
(~95%) and IRB is awaiting completion certificate for the same. The final
project cost of Surat Dahisar now stands at | 2,535 crore vs. | 2256
indicated earlier. We have now built in higher cost for Surat Dahisar and
consequently it now contributes marginally negative in our BOT valuation.
ƒ Construction division to slow down in H2FY12E…
With the completion of the Surat Dahisar & Kolhapur projects, IRB’s
construction revenues grew 77.3% YoY to | 1075.8 crore in H1FY12. In
H2FY12, we model a 7.5% YoY decline in construction revenues to | 936
crore as strong ramp up is required in the under construction projects
(Talegaon, Jaipur and Amritsar projects – all three are 15-20% completed
yet). Together, these projects account for | 2870 crore in total order book
of | 9637 crore in Q2FY12 and are expected to get completed by FY13.
V a l u a t i o n
At the CMP, the stock is trading at 12.2x FY13E EPS and 1.7x FY13E P/BV.
With a strong project portfolio and robust order book, we maintain our
BUY rating with an SOTP price target of | 209/share (BOT project - |
124/share, construction business - | 80/share and investment in real
estate business at | 5/share).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Traction in under construction projects holds key…
IRB Infra reported healthy Q2FY12 numbers led by strong construction
segment performance. The margin at 43.7% vs. our estimates of 41%
was better owing to stronger construction segment margins at 23%
against our estimates of 21%. With the Surat Dahisar project completed,
we await traction in under construction projects, which should drive
revenue growth. We maintain BUY with SOTP price target of | 209/share.
ƒ Healthy Q2FY12 numbers driven by construction segment show
IRB’s topline grew 50.1% YoY to | 735.9 crore on account of strong
execution in the construction division. The overall margin at 43.7% was
above our expectation as the construction segment margin was at 23%
vs. our estimates of 21%. Nonetheless, PAT at | 110.1 crore was
marginally above our expectation despite strong operating profit growth
due to a sharp rise in interest expenses of |141 crore. Interest expenses
were higher due to forex losses of |14 crore.
ƒ Surat Dahisar & Kolhapur IRDP completed, awaits certificate…
The Surat Dahisar & Kolhapur project has been completed substantially
(~95%) and IRB is awaiting completion certificate for the same. The final
project cost of Surat Dahisar now stands at | 2,535 crore vs. | 2256
indicated earlier. We have now built in higher cost for Surat Dahisar and
consequently it now contributes marginally negative in our BOT valuation.
ƒ Construction division to slow down in H2FY12E…
With the completion of the Surat Dahisar & Kolhapur projects, IRB’s
construction revenues grew 77.3% YoY to | 1075.8 crore in H1FY12. In
H2FY12, we model a 7.5% YoY decline in construction revenues to | 936
crore as strong ramp up is required in the under construction projects
(Talegaon, Jaipur and Amritsar projects – all three are 15-20% completed
yet). Together, these projects account for | 2870 crore in total order book
of | 9637 crore in Q2FY12 and are expected to get completed by FY13.
V a l u a t i o n
At the CMP, the stock is trading at 12.2x FY13E EPS and 1.7x FY13E P/BV.
With a strong project portfolio and robust order book, we maintain our
BUY rating with an SOTP price target of | 209/share (BOT project - |
124/share, construction business - | 80/share and investment in real
estate business at | 5/share).
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