IRB Infra does not see any further impact on its financials due to the proposed draft RBI guidelines on financing, as banks are already charging higher interests for under-construction projects by 60-70 basis points.
For Kotak Institutional Equities, IRB’s numbers were in-line results as strong execution (project ramp-up and improved toll collection) was aided by a steady margin performance.
IRB Infrastructure Developers Ltd (IRB Infra) saw its shares rising 3 per cent in Wednesday’s trade following March quarter (Q4FY24) results. Analysts said Q4 revenue and profit prints were ahead of their estimates but margin disappointed due to weak mix. They see limited upside potential ahead for the stock, following a 143 per cent rally in the last one year.
IRB Infra does not see any further impact on its financials due to the proposed draft RBI guidelines on financing, as banks are already charging higher interests for under-construction projects by 60-70 basis points against operational projects. The company expects considerable orders worth Rs 2 lakh crore over the next 12-18 months in BOT toll and it expects to win Rs 25,000-30,000 crore or 15 per cent market share.
“We have recalibrated our EPS estimates higher to factor in better growth and resultant improvement in margins owing to the mix. Given the improving outlook on ordering, better-than-expected toll growth and likely interest rate cuts, we increase our SOTP-based target price to Rs 72/shared. Owing to the limited upside on CMP, we maintain our ADD rating on the stock,” HDFC Institutional Equities said.
For Kotak Institutional Equities, IRB’s numbers were in-line results as strong execution (project ramp-up and improved toll collection) was aided by a steady margin performance.
With private InvIT distributing cash flow to IRB Infra, Kotak believes this sets the stage well for the company to participate in the growing bid pipeline for BOT/TOT projects at a time when competition is limited.
“We retain ADD rating with a revised FV of Rs 70 (Rs 65 earlier) as we roll forward to March 2026E,” the brokerage said.
Motilal Oswal said IRB’s order inflows may pick up going ahead. With a strong order book of Rs 34,800 crore and a robust tender pipeline, driven by BOT projects, it expects a revenue CAGR of 13 per cent over FY24-26.
“We broadly retain our APAT estimates for FY25/FY26. Reiterate Neutral with a revised SoTP-based target price of Rs 61,” it said.
Meanwhile, InCred Equities finds the stock Rs 40-worthy. It noted that IRB Infra stock is trading at a Price to book value of 2.9 times against a 10-year median of 1.3 times.
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