IRB INFRASTRUCTURE - Research Report

IRB Infrastructure Developers Ltd is an infrastructure development and construction company in India with extensive experience in the roads and highways sector. It is also in other business segments in the infrastructure sector, including maintenance of roads, construction, airport development and real estate.

It is India’s largest road BOT operator with a portfolio of 36 highway projects. The company’s TOT portfolio aggregates 37% of the total TOT market share. Also, it has a 20% share in Golden Quadrilateral Highway Network. Company can undertake construction of 500 to 600 kms at any given point of time.

Company has 15,444 lane KM Road portfolio and it generates 10% Market share of pan India Toll Revenue, an Asset base of INR approx. 80,000 Crores, 72 Toll Plazas with 820 FASTag compliant lanes which caters to around 1.3 million vehicles every day.

It has 4 business verticals, 1^st is wholly owned concessions which includes 2 Tolling projects i.e. Mumbai Pune expressway in Maharashtra and Ahmedabad Vadodara Expressway in Gujarat, 3 under construction projects i.e. Vadodara Mumbai Expressway (Pkg -7) in Gujarat, Pathankot Mandi (Pkg-1) in Himachal Pradesh and Chittoor – Thachur (Pkg -4) in Tamil Nadu and the average daily toll collection reached 66 Mn in Fy24. Its 2^nd business vertical is Private InvIT which includes 14 Tolling projects and 1 under construction project in states like Rajasthan, West Bengal, Karnataka, Haryana, U.P. and M.P. and average daily toll collection reached 85 million in FY24.

Company’s 3^rd business vertical Public InvIT which includes 5 tolling projects and 1 operational project and average daily toll collection reached 742 million in Fy24. Its 4^th Business vertical is EPC business under which IRB has executed 18,000 lane kms of projects across 36 projects with professionally managed EPC team with avg track record of more than 25 years. Its total order book as of March 2024, stands at Rs. 348 Bn out of which Rs. 291 Bn is on O&M basis and Rs. 57 Bn is on EPC basis.

Company’s majority of the TOT/BOT/HAM projects are in high growth states on a lane per kms basis.

 

 

Fundamentals:

CMP	Rs. 67.26
52 - week high	Rs. 76.6
52 – week low	Rs. 25.0
Dividend % (consolidated)	0.41 %
ROE	4.47 %
BVPS (Rs.)	77
Sales (Rs.) (Q4FY24)	7409 cr.
Debt to Equity	1.36
P/E ratio	65.8
EPS (consolidated)	1
P/B ratio	2.9
Market Cap	39,881 Cr.
Face value	Rs. 10
Dividend Payout	30%

 

Financial Results:

Company’s Net Sales at Rs 1,425.95 crore in March 2024 up 34.03% from Rs. 1,063.91 crore in March 2023. Its Quarterly Net Profit was at Rs. 313.57 crore in March 2024 up 462.05% from Rs. 55.79 crore in March 2023. Company’s EBITDA stands at Rs. 757.74 crore in March 2024 up 351.33% from Rs. 167.89 crore in March 2023. IRB Infra EPS has increased to Rs. 0.52 in March 2024 from Rs. 0.09 in March 2023.

Key Updates:

1. Cintra, a subsidiary of Ferrovial, has entered into definitive documents to acquire 24% from GIC affiliates in IRB Infrastructure Trust (“Trust”) as well as 24% stake in MMK Toll Road Private Limited (“MMK”) which is the Investment Manager of the Trust.
2. Infrastructure Developers Ltd has informed that IRB Kota Tollway Pvt. Ltd. and IRB Gwalior Tollway Pvt. Ltd., the Project SPVs of IRB Infrastructure Trust (an Associate of IRB Infra), have signed Concession Agreements with the National Highways Authority of India (NHAI) for Tolling and Operations & Maintenance of the 110 Kms (Approx.441 Lane Kms) stretch comprising of the Kota Bypass stretch on NH76 (new NH27) and Gwalior Jhansi Section of NH44 respectively.
3. IRB Infrastructure Trust has emerged as the preferred bidder for TOT-13 concession announced by the National Highways Authority of India (NHAI), Viz. Tolling, Operation, Maintenance and Transfer of Kota Bypass and Cable Stay Bridge on NH-76 (New NH-27) in the state of Rajasthan and Gwalior-Jhansi section in the State of Madhya Pradesh and Uttar Pradesh respectively.
4. IRB Lalitpur Tollway Pvt. Ltd., a Project SPV of the IRB Infrastructure Trust (an Associate of IRB Infra) recently signed the Concession Agreement with the NHAI for Tolling and Operations & Maintenance of the Lalitpur Lakhnadon stretch of NH44 in the State of Madhya Pradesh on TollOperate-Transfer (TOT) basis.
5. The IRB Golkonda Expressway Private Limited, a Project SPV of IRB Infrastructure Developers Ltd. (IRB Infra) - has signed the Concession Agreement today with Hyderabad Metropolitan Development Authority (HMDA) for Tolling and Operations & Maintenance of Jawaharlal Nehru Outer Ring Road, popularly known as Hyderabad ORR in the State of Telangana on Toll-OperateTransfer (TOT) basis.
6. The Samakhiyali Tollway Private Limited, an SPV and Wholly-owned subsidiary of IRB Infrastructure Developers Ltd. (IRB Infra) recently executed the Concession Agreement with National Highway Authority of India (NHAI) for an upgradation of existing 4 lanes to 6 lanes of NH27 stretch of 90.90 Kms from Samakhiyali to Santalpur in the State of Gujarat on Build-Operate-Transfer (Toll) mode.
7. Company recently marked its entry Marking in the State of Telangana by bagging158 Kms (1,264 Lane Kms) Hyderabad Outer Ring Road (ORR) project under Toll-Operate-Transfer (TOT) model with revenue linked Concession Period of 30 Years for upfront consideration of Rs. 7,380 Crores.
8. Company has started the new Financia Year 2025 on the promising note as it has collectively reported Y-o-Y toll revenue growth of 29% in the very first month of the new financial year, i.e., April 2024. Newly added TOT 12 and TOT 13 Assets start contributing to the monthly toll collection. Company and its Associate Private InvIT had registered robust toll revenue growth of 24% in FY24 over previous year.
9. IRB Sindhudurg Airport Pvt. Ltd., an SPV of IRB Infrastructure Developers Ltd, the developer and operator of the Greenfield Airport Project at Chipi in the Sindhudurg District of Maharashtra recently started the commercial operations from the new Airport. The Air India owned Alliance Air’s flight ATR72-600 type aircraft landed flight at the Airport at 12.52 hours and took off at 15.24 hours at full capacity on board.
10. IRB Infrastructure Developers Ltd (IRB) has emerged as a preferred bidder for the construction of six lanes of 20.060 Kms Pondavakkam to Kannigaipair stretch on the upcoming Chittoor – Thachur Highway in the State of Tamil Nadu at the cost outlay of Rs.909 Crores.

In last 1 Year and 3 Years the stock generated a whooping return of 153% and 465.66% as compared to the rise of Sensex and Nifty in the same period.

India has the second largest road network in the world, spanning about 66.71 Lakh km, which includes national highways, state highways, district roads, and rural roads. This extensive network ensures connectivity across various regions of the country and IRB Infra is one of the leading infrastructure development companies in India in road and highway sector. The pace of NH construction has increased consistently due to the systematic push through corridor-based National Highway development approach, from about 12 km/ day in 2014-15 to about 28.3 km/ day in 2022-23. The total length of national highways in India increased 60 % to 1,46,145 km till December 2023, from 91,287 km in 2014 and is going to increase more in upcoming years with the government’s focus on increasing logistics systems and multimodal transports across the nation. The Indian Government has been actively investing in the development of road infrastructure supported by major initiatives like the Bharatmala Pariyojana with an aim to upgrade and expand the road network, including the construction of expressways, economic corridors, and feeder routes. To give a massive push to infrastructure government has allocating about $1.4 Tn for infrastructure investments until 2025 making it an Opportunity market of $2.44 bn and IRB Infra being the market leader is going to benefit a lot. Considering growth of road and infrastructure projects in upcoming years, company’s proven track record, rise in toll collection on Quarter over Quarter basis and company’s outstanding orderbook and ongoing projects positions, investors can invest in this company for log term period.

HET ZAVERI

info@smartinvestment.in

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