Buy IRB Infrastructure for target of Rs 289 -Angel Broking
January 31, 2010 by admin
Filed under Brokerage Recommendations
Angel Broking in its research report has recommended a buy rating on the stock IRB Infrastructure for a target price of Rs 289.
The research firm says IRB has one of the largest domestic BOT project portfolios in the Road and Highway Sector comprising 16 projects of which 10 are operational. In light of the immense opportunities that exist in the Road Sector in the near future, IRB’s vast experience and inter-dependent business model, we maintain our bullish stance on the company’s performance.
It further says that, Moreover, IRB’s Construction arm has a robust Order Book of Rs 9,238cr (8.7x FY2010E Revenues), which lends the Segment high Revenue visibility. We have valued IRB’s inter-dependent business model on SOTP basis. Individual Road BOT SPVs have been valued on NPV basis (FY2012E) using the Free Cash Flow to Equity (FCFE) approach (Rs165/share); the Construction Segment has been valued at 8x FY2012E EV/ EBITDA (Rs116/share); the company’s investments in land (adjoining Mumbai- Pune Expressway) and its equity stake in the Sindhudurg Airport project have been valued at 1x FY2009 Book Value (Rs 8/share). We maintain a Buy on the stock with a Target Price of Rs 289.
Source: Moneycontrol.
