Neutral on IRB Infrastructure Developers, target price Rs 240: Phillip Capital (India)

Phillip Capital (India) has neutral call on IRB Infrastructure Developers Ltd. with a target price of Rs 240.0. The current market price of IRB Infrastructure Developers Ltd. is Rs 212.25.

IRB Infrastructure Developers Ltd., incorporated in the year 1998, is a Mid Cap company (having a market cap of Rs 12869.11 Crore) operating in Infrastructure sector.

IRB Infrastructure Developers Ltd. key Products/Revenue Segments include Contract Revenue and Income From Operations for the year ending 31-Mar-2021.

Financials
For the quarter ended 31-03-2022, the company has reported a Consolidated Total Income of Rs 1682.73 Crore, up 12.35 % from last quarter Total Income of Rs 1497.79 Crore and up 1.96 % from last year same quarter Total Income of Rs 1650.41 Crore. Company has reported net profit after tax of Rs 234.93 Crore in latest quarter.

Investment Rationale:
IRB reported Q4FY22 result inline with expectations. Toll collection growth was decent, while EPC revenues remained weak, on weak ‘executable’ orderbook. PAT, adjusted for exceptional items – was broadly inline with expectations. The GIC deal has repaired the company's balance sheet and places it on a solid growth pedestal for next few years. The standalone debt has been reduced to half, and the company is still left with adequate growth capital.

The EPC orderbook, with the receipt of Rs 67 bn Ganga Expressway BOT project, looks healthy too. However, we remain a bit cautious on the toll collection prospects of a mammoth greenfield project like the Ganga expressway and overall limited opportunity in the BOT space. IRB stock has also run-up sharply over the last year (12m, +95%) and its current marketcap of Rs 130bn, leaves limited upside potential.

Promoter/FII Holdings
Promoters held 34.02 per cent stake in the company as of 31-Mar-2022, while FIIs owned 48.79 per cent, DIIs 6.14 per cent.