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IRB Infrastructure (IRB)
Infrastructure
Sharp price run up and sedate traffic growth prompt one notch downgrade. IRB
posted moderate revenue growth of 11.5% to Rs7.5 bn (in line) as construction slowed
on completion of the Surat-Dahisar project. High depreciation and interest cost led to a
3% yoy decline in net PAT to Rs1.3 bn. Traffic growth seemed sedate with Surat-
Dahisar flat and a decline in Bharuch-Surat due to traffic diversion on the Thane-
Ghodbunder road. Downgrade to ADD on recent outperformance and sedate traffic.
Traffic growth seems weak across projects; Surat-Dahisar flat, potential decline in Bharuch-Surat
Mumbai-Pune: Traffic growth of 5.5%. Toll collections at Mumbai-Pune increased by 23.6%
(18% toll revision from April 1, 2011) implying traffic growth of 5.5%.
Surat-Dahisar: Traffic seems flat adjusted for toll increase of 10.5% in September. This
project reported toll collection of Rs1.06 bn, up 11.3% yoy. This implies an average collection
of Rs11.8 mn per day and flat yoy traffic, accounting for 10.5% toll revision in September 2011.
Bharuch-Surat: Traffic potentially declined yoy. Toll revenues for the project increased by
7% yoy in 3QFY12 implying a collection of Rs4.1 mn/day. Toll collections implied a traffic
decline based on toll revision of 10.5% from July 1, 2011.
Tumkur-Chitradurg: Toll collection keeps pace with expectations. Toll collection of Rs380
mn was in line with our annual toll collection expectation of Rs1.6 bn.
Construction sales growth moderates on completion of BOT project; margin expansion surprises
The construction segment delivered moderate growth of 12.7% yoy to Rs5.3 bn (in line with
estimates) versus sharp growth of 79% recorded in 1HFY12. The strong growth in 1HFY12 was
led by construction of the Surat-Dahisar BOT project, which was completed, thus weakening
revenue growth momentum in 3QFY12. The segments surprised positively on the margin front,
recording a sharp expansion of 310 bps yoy to EBITDA margin of 28% in 3QFY12.
Results summary: High interest and depreciation cost led to marginal PAT decline on a yoy basis
IRB’s revenues of Rs7.5 bn, up 11.5% yoy, were in line with our estimate. EBITDA margin
expanded 180 bps yoy to 45.8%, ahead of our estimate of flat yoy margins. High interest and
depreciation cost led to a net PAT decline of 3% yoy to Rs1.3 bn. Net debt was Rs47 bn against
Rs34 bn at the end of FY11).
Downgrade to ADD (from BUY) on recent outperformance, traffic disappointments
We downgrade IRB to ADD from BUY (TP revised to Rs190 from Rs200, cancellation of the Goa
project) on (1) a sharp price run-up, leaving limited upside (rise of 25% over the past month) and
(2) sedate traffic across key projects adversely impacting potential returns from projects.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IRB Infrastructure (IRB)
Infrastructure
Sharp price run up and sedate traffic growth prompt one notch downgrade. IRB
posted moderate revenue growth of 11.5% to Rs7.5 bn (in line) as construction slowed
on completion of the Surat-Dahisar project. High depreciation and interest cost led to a
3% yoy decline in net PAT to Rs1.3 bn. Traffic growth seemed sedate with Surat-
Dahisar flat and a decline in Bharuch-Surat due to traffic diversion on the Thane-
Ghodbunder road. Downgrade to ADD on recent outperformance and sedate traffic.
Traffic growth seems weak across projects; Surat-Dahisar flat, potential decline in Bharuch-Surat
Mumbai-Pune: Traffic growth of 5.5%. Toll collections at Mumbai-Pune increased by 23.6%
(18% toll revision from April 1, 2011) implying traffic growth of 5.5%.
Surat-Dahisar: Traffic seems flat adjusted for toll increase of 10.5% in September. This
project reported toll collection of Rs1.06 bn, up 11.3% yoy. This implies an average collection
of Rs11.8 mn per day and flat yoy traffic, accounting for 10.5% toll revision in September 2011.
Bharuch-Surat: Traffic potentially declined yoy. Toll revenues for the project increased by
7% yoy in 3QFY12 implying a collection of Rs4.1 mn/day. Toll collections implied a traffic
decline based on toll revision of 10.5% from July 1, 2011.
Tumkur-Chitradurg: Toll collection keeps pace with expectations. Toll collection of Rs380
mn was in line with our annual toll collection expectation of Rs1.6 bn.
Construction sales growth moderates on completion of BOT project; margin expansion surprises
The construction segment delivered moderate growth of 12.7% yoy to Rs5.3 bn (in line with
estimates) versus sharp growth of 79% recorded in 1HFY12. The strong growth in 1HFY12 was
led by construction of the Surat-Dahisar BOT project, which was completed, thus weakening
revenue growth momentum in 3QFY12. The segments surprised positively on the margin front,
recording a sharp expansion of 310 bps yoy to EBITDA margin of 28% in 3QFY12.
Results summary: High interest and depreciation cost led to marginal PAT decline on a yoy basis
IRB’s revenues of Rs7.5 bn, up 11.5% yoy, were in line with our estimate. EBITDA margin
expanded 180 bps yoy to 45.8%, ahead of our estimate of flat yoy margins. High interest and
depreciation cost led to a net PAT decline of 3% yoy to Rs1.3 bn. Net debt was Rs47 bn against
Rs34 bn at the end of FY11).
Downgrade to ADD (from BUY) on recent outperformance, traffic disappointments
We downgrade IRB to ADD from BUY (TP revised to Rs190 from Rs200, cancellation of the Goa
project) on (1) a sharp price run-up, leaving limited upside (rise of 25% over the past month) and
(2) sedate traffic across key projects adversely impacting potential returns from projects.
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