Accumulate IRB Infra; target of Rs 145: Emkay Global

Emkay Global Financial Services has revised its rating on IRB Infrastructure Developers from buy to accumulate with a price target of Rs 145, in its report dated May 26, 2009.

“IRB Q4FY09 results were below our estimates primarily on account of higher operating costs. Revenues for the quarter increased by 34.3% qoq to Rs 3.21 billion (our estimate Rs 3.15 billion) driven by 41.3%qoq increase in construction revenues while BOT revenues were up 19.8% sequentially. Operational costs during the quarter jumped up by 45.8% qoq to Rs 2.0 billion as the company incurred higher periodic maintenance costs during the quarter which were schedule to be incurred over FY10.”

“EBITDA margins for the construction business were up 422bps to 18.2% while BOT EBITDA margins were down 1412bps. We expect construction EBITDA to improve with addition of high margin Surat Dahisar construction project and falling commodity prices. At CMP of Rs 142, the stock is trading at 11.6x FY10E earnings. We are revising our rating on the stock from ‘BUY’ to ‘ACCUMULATE’ with a revised price target of Rs 145,” says Emkay Global Financial Services’ research report.

source: Moneycontrol

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