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IRB Infra Developers – Strong Outlook

May 5, 2010

IRB reported Q4 revenues of Rs5bn (+56% y/y, +16% q/q, UBS est Rs5.8bn), EBITDA of Rs2.3bn (+92% y/y, +2% q/q, UBS est of Rs2.3bn) and PAT of Rs1.4bn (+236% y/y, +55% q/q, UBS est Rs1.1bn). Lower-than-expected toll revenues were compensated by higher construction margins. Higher reported PAT is due to accounting for MAT credit (Q4 tax is a positive Rs393m; PBT is Rs1.1bn; this credit will be utilized in later years and has no cashflow impact in our view).FY10 effective consol tax rate is ~3%, due to positive tax of Rs114m in BOT segment.

Mumbai-Pune traffic growth at 7.2%; traffic in most stretches improves. Surat-Dahisar daily collections improve to Rs10.1m; and Bharuch-Surat flat.

Potential new project wins key to stock performance IRB is in the final stage for bidding (RFP stage) for five projects worth Rs215bn.
The financial bidding for these projects will take place over next two quarters. As per management, projects worth Rs60-80bn could be funded through internal accruals without raising any new equity.

EPS Estimates of IRB Infra for FY 11 and FY 12
HSBC – 13.8 and 16.9
UBS – 12.64 12.5 [yes flat]
Bofa Merrill – 14.23 16.85

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