Company targets Rs60-80bn order inflows in 4QFY21E on the back of strong NHAI bid pipeline. Order book stands at Rs113.1bn (2.9x TTM revenues). IRB reported strong quarterly performance, in line with our estimates primarily driven by sharp uptick in toll revenues. In 3Q, toll revenues came in...

IRB's consolidated financials are not comparable YoY due to the monetization of nine assets through the InvIT route and consolidation of the Mumbai-Pune Phase II project. The Construction business reported a revenue/EBITDA/adjusted PAT decline of 22%/22%/53% YoY. Normalcy in traffic led to strong (32% QoQ) growth in collections across 13 toll assets of IRB and IRB InvIT. Though losses from the associates reduced sequentially, higher depreciation from Mumbai-Pune Phase II project led to a 29% miss on our earnings estimate in spite of a beat on our revenue estimate. For...

At the end of Q2FY21, IRB's order book (OB) was at ~| 12,150 crore (2.2x TTM revenues), largely contributed by the construction segment (| 5,129 crore) and O&M; job of BOT, ToT projects (| 7,035 crore). However, in contrast with industry focused asset-light EPC business, IRB's emphasis remains on BOT, ToT and HAM projects wherein it is targeting ~| 5,000 crore of order inflows in the rest of FY21. The company has also participated in the bidding process of the ToT-5 bundle. We note that order inflow will...

Given strong bid pipeline for BOT projects, management guided Rs60-70bn order inflows in FY21E. Order book stands at Rs121.6bn (2.9x TTM revenues) IRB reported decent quarterly performance in line with our estimates led by...

Sadbhav Engineering: Sadbhav Engineering (SEL) reported revenue at Rs 4.1bn (-27/+80% YoY/QoQ, in-line). PAT too was in line at Rs 52mn, as EBIDTA margins normalized to 12.1%. Labour availability has improved to pre-COVID level. Standalone order book stood at Rs 94bn as it won orders of Rs 16bn in 2QFY21. Net debt increased marginally to Rs 10.9bn (vs 10.6bn QoQ). However, with receivables of ~Rs 17bn, working capital still remains stretched. Improvement in balance sheet and pick-up in execution will lead to re-rating. IRB Infra: IRB reported revenue at Rs 11.2bn, beating our estimate by 7%, on 40% QoQ recovery in toll collections though EPC remained muted. However, the company registered loss of Rs 197mn, marginally lower than our estimated loss of Rs 231mn. While toll collection in majority of the BOT assets have reached near pre-COVID level, execution remained impacted due to monsoon. IRB secured a HAM order worth Rs 18bn during the quarter, taking the orderbook to Rs 122bn. Consolidated net debt increased to Rs 127bn from Rs 119bn on Jun 20-end, with net D/E at 1.94x (1.75x on 1QFY21-end). With monsoon behind, we expect execution to ramp-up in second half. Besides, traffic is likely to normalize with further ease of restrictions. We maintain BUY on IRB given affordable valuation and comfortable liquidity position, with an unchanged SOTP based target price of Rs 157/Sh.

We maintain BUY on IRB with SOTP based target price of Rs 142/Sh. IRB Infra: IRB reported revenue at Rs 10.2bn, 15% ahead of our estimate. However, the company registered loss of Rs 301mn, marginally behind our estimated loss of Rs 276mn, on account of higher finance cost, taxes, and losses from the JVs/associates. Toll collection in June reached to 80% of June-19 level. Consolidated net debt stood at Rs 119bn, with net D/E at 1.75x. Including the order of Rs 17bn won in August-20, orderbook now stands at Rs 129bn.

Post relaxation in lockdown, company saw sharp revival in toll collection across projects which stood at an average ~80% YoY pre-covid levels in July'20, with some projects already reaching at pre-covid levels. On the back of extension of concession period by NHAI and RBI's relief of loan moratorium, management expects NPV of cash flow from its BOT portfolio to remain largely unaffected because of Covid-19 pandemic. IRB Infrastructure is one of the largest BOT toll operators in the country having market share of ~22% in the total Golden Quadrilateral projects with...

primarily on BOT route (due to cash crunch at NHAI) with 15 BOT projects to bid in pipeline, already. The company expects to add few more projects to its portfolio. Recently IRB emerged as a preferred bidder in ~Rs26bn (18% higher than NHAI costs) BOT project- Palsit to Dankuni on NH-19; however, the bid just got terminated (our understanding is due to pricing) from NHAI. The balance sheet has strengthened with a) retention of Mumbai-Pune expressway on TOT mode (IRB tied up Rs66bn debt and completed equity infusion of Rs14.3bn equity in June'20) and b) conclusion of stake sale in a...

We maintain BUY with an SOTP based TP of Rs 142/Sh. IRB delivered in-line revenue with EBITDA beat of 16% and APAT miss of 25%. IRB-GIC deal is now concluded. Rs 37bn of proceeds realised till date have been utilised towards IRB-GIC INVIT SPVs debt reduction to the tune of Rs 30bn making them FCF positive with no funding support requirement envisaged. Further, 1st tranche of Rs 65bn payment to MSRDC for MP expressway completed with Rs 55bn debt drawdown (of Rs 66bn sanctioned) and Rs 10bn equity

19 June 2020 On account of the IRB-GIC InvIT deal, the reported financials of IRB have undergone a change. This results in reported gross debt and leverage declining sharply and provides IRB with room to bid for new projects. The Mumbai-Pune Phase II contract has achieved financial closure and the company has also paid the upfront equity of INR14.4b to MSRDC. We expect the projects IRR at 18%+ a major booster for IRBs fortunes. EPC business growth looks challenging and is totally dependent on new ordering. EPC order book (OB) stands at just INR47.3b with OB/rev ratio of 0.9x, the lowest since IRBs listing. Till the time, the company refills its order book (through BOT model as per company strategy), the low EPC revenue visibility is likely to remain an overhang on the stock performance. We broadly maintain our earnings estimate (<5% cut), but have incorporated new reporting structure into our model.

IRB Infrastructure (IRB) has bagged Mumbai-Pune expressway project on Change in Estimates | Target | Reco Toll-Operate-Transfer (ToT) basis for an aggregate value of Rs82.6bn from...

The company has received approvals from NHAI, lenders and SEBI for the IRB-GIC deal and is expecting to receive the proceeds during this quarter. The proceeds from this deal should help IRB meet its equity infusion requirement of ~Rs 28bn in under implementation projects. IRB will also leverage this partnership to bid for upcoming BOT and TOT projects, though it will have to bring in 51% of equity under such agreements. Securing Mumbai Pune expressway TOT project will provide further fillip to the revenues from toll collections. We maintain BUY. Key risks (1) Sustainability of toll revenue collection rate in the BOT portfolio, (2) Market acceptability for BOT projects IRB delivered in-line revenue with EBITDA/APAT beat of 9%/17%. IRB-GIC deal is expected to conclude during 4QFY20 with all the approvals in place. We maintain BUY with an SOTP based TP of Rs 172/Sh.

The Mumbai-Pune project can change the fortunes of the company, given the annual toll collection potential of INR10b+. While a few details of the bid and the final awarding are still awaited, we believe the project can generate IRRs of 20%+ for IRB. announcing the second InvIT with GIC and (2) emergence as a winner in Mumbai-Pune project award, in a timely manner and that too as a sole bidder. We await final awarding of the project (recall that the project was scrapped earlier, but management suggested that rules do allow for awarding on second attempt if there is sole bidder) before incorporating it in our earnings. revenue declined 2.6% YoY to INR17b. EBITDA declined 6% YoY to INR7.1b and was 8% ahead of our estimate on account of higher margins. PAT came in at INR1.6b (-27% YoY) and was 12% below our estimate. Construction revenue grew 10% YoY to INR13.

IRB Infrastructure's (IRB) consolidated net profit grew by 15.7% y-o-y for Q2FY2020, led by strong execution along with lower ETR. Construction revenue reported 43% y-o-y rise, led by strong execution in Agra Etawah and Hapur Moradabad projects. However, BOT revenue declined by 16% y-o-y on account of handover of key project and muted traffic growth across projects barring couple of projects. OPM contracted by 413 BPS y-o-y on account of higher construction revenue booking (although construction segment's OPM improved...

IRB GIC deal is a game changer for company, IRB has secured means to partly fund its balance equity requirement of Rs 27.6bn. The free cash flow potential of the portfolio is Rs 880bn over the project lifecycle (~20yrs), with Rs 2bn/yr IRB share from first year. IRB will leverage this partnership to bid for upcoming BOT and TOT projects, though it will have to bring 51% of equity share. We maintain BUY. Key risks (1) Declining toll revenues in certain projects, (2) Market acceptability for BOT projects and (3) Delay in appointed dates in remaining HAM projects, contributing 25% to order book by value. IRB delivered strong 9/15/28% 2QFY20 Rev/EBIDTA/APAT beat. With limited visibility on NHAI BOT project awards we cut IRB EPC multiple from 6x to 4x 1-yr forward. We maintain BUY with a reduced TP of Rs 172/Sh.

23 October 2019 EPC revenue was up 42% YoY, implying strong execution of under- construction projects. EPC margin surprised at 29.1%, as lower-margin HAM projects are yet to commence construction. PBT declined by 4% YoY at INR3b, with lower depreciation cost getting offset by higher interest expense. Note that the Mumbai-Pune project completed its concession period during the quarter, leading to a decline in profit from the BOT portfolio. On account of the lower tax rate of 33.5% (v/s 44.9% in 2QFY19), net profit was up 16% YoY at INR2b (33% beat). stands at INR113.8b, with an EPC OB/rev ratio of just 1.9x. This provides low revenue visibility and may lead to a decline in EPC revenue in FY21 if road awarding does not pick up meaningfully over the near term. Moreover, two HAM projects in the order book continue facing challenges on land acquisition and there is a high probability of them being cancelled.

Announces | 4,400-crore deal with GIC at 1x P/BV IRB announced a | 4,400 crore deal with GIC Singapore. As part of the transaction, IRB will transfer nine of its BOT assets (portfolio) into a private infrastructure investment trust in which it will hold a controlling stake of 51%. EPC and O&M; contracts under this InvIT will continue to be with IRB. The deal has been done at 1x P/BV. GIC would infuse ~| 4,400 crore in the trust, which will consist of upfront payment of | 3,000 crore (to be utilised by IRB for debt reduction) and balance | 1,400 crore towards equity...

With GIC, IRB has secured means to partly fund its balance equity requirement of Rs 29.5bn. The free cash flow potential of the portfolio is Rs 880bn over the project lifecycle (~20yrs), with Rs 2bn/yr IRB share from first year. IRB will leverage this partnership to bid for upcoming BOT and TOT projects, though it will have to bring 51% of equity share. We maintain BUY. Key risks (1) Declining toll revenues in certain projects, (2) Market acceptability for BOT projects and (3) Delay in appointed dates in remaining HAM projects, contributing 25% to order book by value. IRB delivered strong 18/28% 1QFY20 EBIDTA/APAT beat. Private InvIT announcement with GIC (Rs 44bn investment for 49% stake, ~1x P/BV) removes BOT asset recycling overhang. We maintain BUY with a TP of Rs 212/Sh.

IRB Infrastructure's (IRB) consolidated net profit declined by 17% y-o-y on account of increased interest and depreciation led by inclusion of two tolling assets and higher tax outgo. Net revenue grew by 15% y-o-y, supported by EPC and BOT segments, while blended OPM remained steady y-o-y. The major highlight was the signing of a definitive agreement with GIC for transfer of nine assets (three operational and six under various stages of construction) in private InvIT with IRB having management control with 51% stake. The deal is valued at ~1x P/B, which...