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    IRB Infra shares rise over 4% after Q4 results. Should you buy or sell?

    Synopsis

    IRB Infrastructure Developers saw a 4.3% rise in shares on BSE as it reported a 45% YoY increase in Q4 net profit to Rs 188.9 crore, with revenue up 27% YoY.

    IRB Infra shares rise over 4% after Q4 results. Should you buy or sell?Getty Images
    Shares of IRB Infrastructure Developers rose 4.3% to Rs 68.9 in Wednesday's trade on BSE after the firm reported a 45% year-on-year (YoY) jump in net profit for the March quarter of 2023-24 to Rs 188.9 crore.

    Sequentially, the company's net profit remained flat. In the October-December quarter, IRB Infra reported a net profit of Rs 187 crore.

    Its revenue from operations grew by 27% YoY to Rs 2,061 crore for the quarter. Sequentially, net sales increased by 4.7%.

    The company also declared a 3rd interim dividend of Re 0.10 per equity share of the face value of Rs 1 (@10% of the face value of the share) for the financial year 2023-24. The record date for the payment of dividend is Wednesday, May 15, 2024.

    IRB Infrastructure recorded a 20% increase in toll revenue from the Mumbai–Pune Expressway in FY24. The company negotiated an 18% toll hike in April 2023, surpassing other roads which saw only a 5% increase for FY24.

    Also Read: Voltas shares drop 9% as margins disappoint across segments

    Should you buy or sell IRB Infra's stock? Here's what analysts say:

    InCred Equities

    Following the Q4 results, InCred Equities maintained its 'Reduce' rating on the stock with a target price of Rs 40.

    "We value the EPC vertical at 5x FY25F EV/EBITDA considering the strong order book. At CMP, the stock trades at 2.9x P/BV FY24. We value the IRBIF projects at 1x P/BV, IRB Infrastructure’s stake in IRB InvIT at the current market price and IRB Infrastructure’s BOT projects using DCF," it said.

    Motilal Oswal

    Motilal Oswal reiterated the 'Neutral' rating on IRB Infra with a revised target price of Rs 61.

    "IRB’s performance was in line with our expectation. Given its strong order pipeline of INR2t and the company’s track record of winning 25-30% of the project pipeline, we expect IRB’s order inflows to pick up. With a strong order book of INR348b as of Mar’24 and a robust tender pipeline, driven by BOT projects, we expect a revenue CAGR of ~13% over FY24-26. We broadly retain our APAT estimates for FY25/FY26," Motilal said.

    Kotak Institutional Equities

    Kotak Institutional Equities retained its 'Add' rating with a revised target price of Rs 70 (earlier: Rs 65).

    "IRB reported in-line results as strong execution (project ramp-up and improved toll collection) was aided by a steady margin performance. With private InvIT distributing cash flow to IRB, we believe this sets the stage well for the company to participate in the growing bid pipeline for BOT/TOT projects at a time when competition is limited," it said.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)



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