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YES Securities
IRB Infra (Accumulate)
CMP: ₹219.4
Target: ₹295
IRB Infrastructure Developers Ltd is a road build-operate-transfer (BOT) operator. The company's principal activity is the construction and maintenance of roads.
IRB Infrastructure has a portfolio of 14 BOT assets with a market share of 11.64 per cent in the golden quadrilateral and road portfolio of 7,767 lane km as of December 31, 2017. Large part of IRB’s portfolio is along the high traffic-density corridors in Western India making it one of the best plays on anticipated traffic-growth. In March 2018 alone the group has so far received letter of award for 3 HAM projects and emerged as preferred bidder for another project on DBFOT (design, build, finance, operate and transfer) basis aggregating ₹8,910 crore augmenting its construction orderbook to ₹15,300 crore as of March 22, 2018, from ₹7,400 crore as of December 31, 2017, providing revenue visibility over the next three years.
We believe IRB’s foray into HAM with more assured cash flows and the upcoming TOT (toll-operate-transfer) opportunity should provide the next leg of growth and drive re-rating.
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