Standard Chartered puts a 'buy' on IRB infrastructure
IRB is an attractive play on impending growth in the highway space. At the target price of Rs 337, IRB will quote at a PE of 48x and P/BV ratio of 5.5x on our ‘10 estimated financials.
By ET Bureau |
RESEARCH: STANDARD CHARTERED
RATING: BUY
CMP: Rs 234
IRB, which currently has 447 km of toll roads in operation, predominantly in Maharashtra, has additional concessions for 690 km, which are likely to be operational by FY12. Currently, it is the only company in the build, operate and transfer (BOT) space with an experience of commissioning larger (over 200 km) toll projects.
As the National Highways Authority of India (NHAI) and various state road development corporations (SRDCs) offer over 200 km toll road projects, IRB has developed adequate expertise and balance sheet strength to win more projects. The company has bid for 67% of the total projects of the National Highways Development Project currently on offer.
The government has presented a work plan for over 24,398 km of various phases of NHDP to be developed over FY11-14. Over 80% of this is to be developed under the BOT toll or annuity routes offering ample opportunities for project developers. IRB is an attractive play on impending growth in the highway space. At the target price of Rs 337, IRB will quote at a PE of 48x and P/BV ratio of 5.5x on our ‘10 estimated financials.
RATING: BUY
CMP: Rs 234
IRB, which currently has 447 km of toll roads in operation, predominantly in Maharashtra, has additional concessions for 690 km, which are likely to be operational by FY12. Currently, it is the only company in the build, operate and transfer (BOT) space with an experience of commissioning larger (over 200 km) toll projects.
As the National Highways Authority of India (NHAI) and various state road development corporations (SRDCs) offer over 200 km toll road projects, IRB has developed adequate expertise and balance sheet strength to win more projects. The company has bid for 67% of the total projects of the National Highways Development Project currently on offer.
The government has presented a work plan for over 24,398 km of various phases of NHDP to be developed over FY11-14. Over 80% of this is to be developed under the BOT toll or annuity routes offering ample opportunities for project developers. IRB is an attractive play on impending growth in the highway space. At the target price of Rs 337, IRB will quote at a PE of 48x and P/BV ratio of 5.5x on our ‘10 estimated financials.
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