IRB Infra Q1 Results Review - Inline; Execution Set To Pick Up With Robust Order Book: Motilal Oswal

Motilal Oswal Report

IRB Infrastructure Developers Ltd.’s revenue declined 15% YoY to Rs 16.3 billion in Q1 FY24 (inline). Revenue for Q1 FY23 included Rs 4.2 billion of claims received from National Highway Authority of India toward its Pathankot-Amritsar built-operate-transfer project. Adjusted for this, revenue for Q1 FY24 increased by 9% YoY.

Ebitda margin stood at 47.6% in Q1 FY24 and was largely in line with our estimates. Higher tax outgo and increased losses in joint venture/associate led to adjusted profit after tax of Rs 1.3 billion, 14% below our estimate.

During Q1 FY24, IRB Infra was awarded letter of acceptance for the Hyderabad outer ring road toll-operate-transfer project, entailing a 30-year revenue linked concession period for an upfront consideration of Rs 73.8 billion.

IRB Infra has strategically diversified its current portfolio across 10 rapidly growing states, and its order book stands at Rs 337 billion as of June 2023. Based on this, we expect a revenue compound annual growth rate of ~13% over FY23-25.

We maintain our 'Neutral' rating with our SoTP-based target price of Rs 28 per share.

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