IRB Infra Developers Ltd - Q3FY11 Results Update (Keynote Capitals)

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Q3-FY11 earnings updates on IRB Infrastructure Developers Ltd.

IRB Infrastructure Developers Ltd, one of the largest and most experienced BOT player in the country has posted Q3FY11 results in line with our expectation.

The company has shown total revenue growth of 54.4%% Y-o-Y to `668.9Cr from `433.1Cr for the quarter ended 31st Dec, 2010. EBIDTA grew 29.2% to `293.5.6Cr from `227.1Cr and PAT showed growth of 42.7% to `135.9Cr from `95.3Cr. During the quarter Net Sales, EBIDTA and PAT grew 36.4%, 24.2% and 33.5% Q-o-Q basis respectively.

Key Performance Highlights

Ø      IRB will continue to concentrate on road projects. It plans to maintain a healthy balance sheet and awaits the consolidation phase, which we expect over the next few years.

Ø      Toll Revenues:

         •        Net Toll revenues rose by 3.7% to `214.0Cr in Q3FY11 from `206.4Cr in Q3FY10.

         •        Considerable growth in the toll revenue collection from Surat-Dahisar & Baruch-Surat by 9.3% and 7.3% repectively and in Mumbai-Pune Expressway increased by 5%

         •        Out of the total total toll collection, contribution from Surat-Dahisar was highest at 38.4% followed by Mumbai-Pune at 32.5% and Bharuch-Surat at 14.1%.

Ø      EPC Business: EPC business has shown 68.5% as against 53.3% Y-o-Y.

Outlook & Valuation

NHAI has proposed for awarding orders worth `1000bn over the next 12-15months targeting 20kms a day. Since IRB is a prominent player in BOT projects, we expect there will be immense opportunity for the company. On the basis of valuation, we maintain positive outlook with a ‘buy’ arriving at target price of `265 per share on the basis of 16.5x multiple of FY12E earnings. At CMP, the stock is trading at a PE multiples of 12.7 and 12.5 of FY11E & FY12E respectively.