Infra stock in focus after emerging as the lowest bidder for TOT project from NHAI 

Synopsis: IRB Infrastructure Developers Ltd  has recently announced that IRB Infrastructure Trust has emerged as a preferred bidder for a Toll-operate-Transfer project which involves tolling, operations, maintenance and eventual transfer of national Highway-16 in Odisha.

The shares of one of the leading highway infrastructure companies in India, engaged in construction works in accordance with EPC contract, were in focus after emerging out as a preferred bidder for the TOT project awarded by NHAI. 

With the market capitalization of Rs. 25,750 Crores, the shares of IRB Infrastructure Developers were approximately  trading at Rs. 42 per equity share which is 31 percent discount  from its 52 week high of Rs. 61 and trading at a P/E of 29.5 whereas industry P/E stands at 18.8

What is the NEWS

IRB Infrastructure Developers Limited reported to the market that its associate, IRB Infrastructure Trust, has been identified as the preferred bidder for NHAI’s TOT-18 project, in relation to the tolling, operating, maintaining, and transfer of the 74.5 km Chandikhole – Bhadrak section of NH-16 in Odisha. As part of the project arrangement, IRB Infrastructure Trust will pay Rs. 3,087crore to NHAI in an initial upfront concession payment on account of its revenue-linked concession period of 20 years, based on tolls liable to annual variation of 3% plus 40% of wholesale price index. 

The tolling and maintenance of the project will begin on the appointed date. IRB Infrastructure Developers will serve as project managers on this project. This is IRB’s sixth TOT project acquisition. It will mark IRB Infrastructure Developers’ entry to its 13th state and second in Eastern India. The project will further boost its order book by Rs. 1,600crore and will cement it once again as the largest TOT Road asset player in India.

About the Company and Financials

IRB Infrastructure is majorly engaged in development of private toll roads highways infrastructure having an asset base of approximately Rs. 94,000 Crores in 13 states across the parent company and two InvITs. The company has a strong record of constructing, tolling, operating and maintaining around 20,500 lane Kms across India with having around 16 percent share in Golden Quadrilateral project and 12 percent share in India’s north south highway connectivity. It has 28 highway projects that include 18 BOT, 6 TOT, and 4 HAM projects after adding the TOT 18 project to IRB project portfolio. 

Year on Year analysis: Revenue from operations has increased from Rs. 1586 Crores to Rs. 1751 crores up, 10.4 percent. Operating profit has increased from Rs. 683 Crores to Rs. 925 Crores, up 35.4 percent and net profit has increased from Rs. 100 Crores to 141 Crores, up 41 percent. 

Quarter on Quarter analysis: Revenue from operations has decreased on a quarterly basis from Rs. 2099 Crores to Rs. 1751 Crores, down 16.5 percent. Operating profit has decreased from Rs. 952 Crores to 925 Crores, down 2.8 percent and net profit has decreased from Rs. 202 crores to  Rs. 141 Crores, down 30 percent.

Inshort: Shares of IRB Infrastructure Ltd were in focus after   IRB Infrastructure Trust has emerged as the preferred bidder for NHAI’s TOT-18 project involving tolling, operation and maintenance of the 74.5-km Chandikhole–Bhadrak stretch of NH-16 in Odisha. The project entails an upfront concession fee of ₹3,087 crore for a 20-year period, strengthening IRB’s position as the largest player in the TOT road assets space.

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