IRB INFRASTRUCTURE (CMP Rs 94)
The company is in the business of construction as well as operation of major road projects. These not only include funded projects for major bodies like NHAI, MSRDC, PWD and various municipal corporations but their own BOT projects also. All in all, so far, the company has constructed & maintained (Includes EPC, O&M & BOT projects) more than 1200 km of roadways.
Mumbai-Pune Expressway, Bharuch-Surat and Surat-Dahisar are the prestigious projects done by IRB. Other projects include Thane-Bhiwandi Bypass, Bhiwandi Wada, IRDP-Kolhapur, Thane-Ghodbunder, Pune-Nashik and Pune-Solapur on BOT basis. IRB has 1400 acre of land in Pune for Commercial and residential development in future. The company will enjoy toll revenue sharing as long as it has Concession Rights:- Thane-Bhiwandi Bypass 18 years, Mumbai Pune Expressway 15 years, Pune-Nasik 18 years, Pune-Solapur 16 years, Thane Ghodbunder 15 years, Bharuch-Surat 15 years, Surat-Dahisar 12 years. (Bharuch-Surat expected to become operational by July’09, Surat-Dahisar already operational this year)
IRB is the largest toll road operator in India with 650 km of toll road under its control. Toll-road operation is a more profitable business than simple construction as margins are higher in toll-collection. IRB, in its agreement with Government about toll-sharing, has provided for gradual increase in toll rates, which will keep the revenue stream secure and strong for the company.
The stimulus packages from Indian Government have started working and that is already seen by Auto sales in Jan-Feb-March 2009. With increasing vehicles on the road, toll collection looks like a very profitable phenomenon. Any new government will try to improve the road-network in India by laying more roads and having more expressways, Infrastructure is a must for Indian growth story and IRB looks very well positioned to capitalize on it.
CMP Rs 94 All time high- Rs 222 All time low- Rs 64
IRB Infrastructure is in a down-channel and trading high volumes. It can reach Rs 120-125 on the pullback which can happen in less than a month.
Medium-term target can be Rs 160. Short-term players can keep Stop Loss at Rs 84 levels. Investors have to accumulate this stock for handsome appreciation and they can look for Rs 210 in a year’s timeframe.
More about the company through brokers’ reports:-
IRB on road to growth: http://www.dnaindia.com/report.asp?newsid=1241570