Motilal Oswal has given Neutral recommendation for IRB Infrastructure with a target price of Rs. 240 in its research report issued on Oct 22, 2022

Motilal Oswal’s research report on IRB Infrastructure

IRB Infrastructure (IRB)’s revenue de-grew 8% YoY to INR13.4b in 2QFY23 (14% below our estimate). Heavy monsoons and delay in appointed dates adversely impacted execution in 2QFY23. EBITDA declined 7% YoY to INR6.65b. On a sequential basis, EBITDA declined 37% due to lower execution. On a YoY basis, APAT more than doubled to INR853 in 2QFY23 (in-line with our estimate). While Construction revenues were soft, toll revenues saw robust growth of ~55% YoY in 2Q FY23. IRB expects the toll revenue momentum to remain strong. IRB recently received appointed date for the Ganga Expressway Project. During the quarter, IRB received part compensation of INR590m from NHAI against losses on Kaithal Rajasthan BOT project, due to the farmers’ agitation. With strong opportunity in BOT/HAM projects, IRB is expecting INR50-70b of new inflows in the remaining part of FY23. With an order book of INR200b as of Sep’22 and a robust tender pipeline, we expect IRB to record 17%/14%/54% revenue/EBITDA/PAT CAGR, respectively, over FY22-24.


We largely retain our estimates and reiterate our Neutral rating with a revised target of INR240 (based on SoTP valuation).

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