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IRB Infrastructure (IRB) is well poised to leverage the government's push on creating highway infrastructure due to its strong balance sheet and its association with the Spain-based Cintra in the build-operate-transfer (BOT) mode of highway building, brokerage firm Ventura said in a report.

"IRB now has the financial firepower with GIC and access to global best practices in the road BOT business with Cintra and is thus uniquely positioned to capitalise on government's NIP, NMP, Gati Shakti initiatives," Ventura said in a report.

Among one of the most experienced and largest road developers in the country, IRB has a network of 11,930 lane km of highways, spread across the length and breadth of the country. The company is a pioneer in the field of BOT mode of highway building.

"We believe that IRB is at the threshold of accelerated growth given its expanding foot-print and improved balance sheet. We expect revenue to grow at a CAGR of 14.7 per cent over FY 22-25 to Rs 9,602.1 crore in FY25. We expect overall blended margins to be tad lower than FY22 levels. Finance cost is expected to fall by 9.8 per cent CAGR as we expect the total debt to decrease from Rs 13,822.5 crore in FY22 to Rs 13,232.1 crore in FY25," Ventura said.

The report said, "As per the company management, high growth in toll rates coupled with a 5-6 per cent traffic growth is expected to result in a 14-15 per cent growth in toll collections in FY23. Also, the healthy growth in toll collections is expected to outweigh the increase in maintenance cost, resulting in improvement in debt servicing capabilities.

"The management is working towards return enhancement through leverage optimisation i.e., bringing down the cost of debt and refinancing. Given the current stronger balance sheet and improved credit rating it is able to seek even better financing terms and optimise the capital structure of the project to bring down cost of funding on an ongoing basis," Ventura said.