Visit http://indiaer.blogspot.com/ for complete details �� ��
IRB Infrastructure (IRB) reported consolidated numbers above our estimates,
primarily led by robust top-line growth in the construction segment, higher EBITDA
margins and lower tax provision. However, at current levels the stock offers limited
upside to our SOTP Target Price of `273 hence, we maintain Neutral on the stock.
Performance above estimates: IRB reported robust top-line growth of 37.8% to
`490.3cr. Management has indicated that construction segment has posted robust
numbers due to the execution pick up in two of its recently bagged projects –
Amritsar Pathankot and Jaipur Deoli – we have factored in the same from the next
quarter onwards. Further, the remaining two projects (Goa Karnataka and
Talegaon Amravati) are expected to contribute to the segment from 3QFY2011
onwards. Hence, the segment is expected to maintain its growth trend. IRB
continues to surprise on the margin front and posted EBITDA margins of 48.2% for
2QFY2011 v/s our expectation of 44.9%. Bottom-line grew 39.9% beating our
estimate mainly owing to the top-line growth, higher EBITDA margins and lower tax
provision (15.5%).
Outlook and Valuation: NHAI has targeted to award orders worth `1lakh cr over
the next one year with a target of constructing 20km/day. We believe if NHAI is
able to achieve even 50% of its target, it would imply abundant opportunities for
road developers like IRB. Hence, we are optimistic on the road segment. We have
valued IRB on SOTP basis with a Fair Value of `273, wherein the road BOT SPVs
have been valued on NPV basis (FY2012E) and have assigned 10% growth
premium (`149.8/share); the construction segment has been valued at 8x FY2012E
EV/EBITDA (`118.1/share); other investments have been valued at 1.5x FY2010
book value (`4.5/share). We remain Neutral on the stock, with limited upside from
current levels.
No comments:
Post a Comment