Buy IRB Infrastructure Developers Ltd For Target Rs.328 - Yes Securities
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Preparing for a smoother sail
Our view
IRB’s 4QFY22 results were a mixed bag with revenues missing estimates due to degrowth in construction segment of 17% YoY, while margins surprised positively. In 4Q, toll revenues in 11 projects (across IRB and private InVIT) saw 5% sequential growth in revenue. With revision in tariff rates from April’22 onward toll collection is expected to witness strong growth in FY23. On the construction side, management expects revenue in the range of Rs50‐55bn for FY23 with EBITDA margins in the range of 22‐24%.
IRB Infrastructure is one of the largest BOT toll operators in the country having market share of ~20% in the total Golden Quadrilateral projects, with over 3,700km of total projects successfully executed. Deal with GIC alongwith arbitration awards with respect to Pathankot Amritsar Toll project and Goa tollway project amounting to Rs7.9bn has further strengthen the balance sheet and reduce the debt level. Since most of the projects have received PCOD and new projects are yet to receive AD, we have revised our construction revenue from Rs51.8bn to Rs48.2bn in FY24. We expect IRB to report revenue/EBITDA CAGR of 13%/13% over FY22/FY24E and ROE of ~14% in FY24E. We maintain with a BUY with a revised SOTP of Rs328/shares, implying an upside potential of 54% from the current levels.
Result Highlights
* For Q4FY22, IRB Infra’s net revenues de‐grew 10.7% YoY to Rs14.3bn (below YSec Rs17.6bn) with degrowth in construction revenues (down 17% YoY). Revenues from toll segment grew 4.6% YoY to Rs4.6bn.
* EBITDA came in at Rs6.4bn, down 15.6% YoY while blended EBITDA margins saw decline of 258bps to 44.8% (ahead of YSec 39.5%). The margins came in higher mainly due to higher share of BOT revenues.
* On bottom‐line front, Adj PAT came in at Rs1.7bn (ahead of YSec of Rs1.5bn) largely attributed to better operating margins and lower finance cost at Rs4.0bn (below YSec Rs4.4bn).
* At the CMP, the stock trades at an EV of 8.4x and 7.3x FY23E/FY24E EBITDA
To Read Complete Report & Disclaimer Click Here
Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632
Above views are of the author and not of the website kindly read disclaimer
.jpg)
