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IRB Infrastructure Developers:Emerging Star

IRB Infrastructure Developers (IRB Infra) has emerged as the preferred bidder for the project of six-laning of 102km of the Ahmedabad-Vadodara section of NH-8 and improvement of the existing two-lane of 93km of the Ahmedabad-Vadodara expressway under phase V on a design-build-finance-operate-transfer (DBFOT) toll basis. The project is worth about Rs5,000 crore with a concession period of 25 years including three years of construction.  

NHAI’s first mega road project; adds sheen to its rich portfolio

IRB Infra has won a new project after almost a year and that too a mega highway project. Further, this is the first mega highway project being awarded by the NHAI and the fact that IRB Infra has bagged it reinforces our confidence in the company. This project will improve the quality of its road BOT portfolio. We expect this project to provide upside potential to our price target. Currently, the stock trades at 11.3x it FY2012E earnings and at 2.3x its FY2012E book value. 

Recommendation: Buy
Price target: Rs285
Current market price: Rs210

Final Note:We maintain our Buy rating on the stock with a price target of Rs285.