IRB Infrastructure Result Updated

7/31/2019 IRB Infrastructure Result Updated

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Please refer to important disclosures at the end of this report 1

Y/E March (` cr) 4QFY12 4QFY11 3QFY12 % chg (yoy) % chg (qoq)Net sales 848 767 745 10.6 13.8Op. profit 381 315 342 21.0 11.5

Net profit 120 103 131 17.1 (8.4)Source: Company, Angel Research

For 4QFY2012, IRB Infrastructure (IRB) reported a modest set of numbers. The

companys revenue came in-line with expectations, but owing to better-than-expected

performance at the EBITDAM level, earnings were higher than estimates. IRB has

decided to acquire 100% stake in an operational (COD August 2009) Omallur Salem

Namakkal BOT road project (69 km) in accordance with its strategy to growinorganically.As per the company, equity IRRs in new road project wins are worth16-18%, owing to aggressive competition witnessed in the road sector. Hence, the

company has acquired an operational BOT project where IRB is expecting equity

IRRs of ~21%. Prima facie the acquisition looks positive for the company.

Result marginally ahead of expectations:IRBs top line witnessed growth of 10.6%yoy to `848cr, marginally ahead of our estimate of `829cr on the back of

maintaining healthy execution pace for under-construction projects. The E&C

segments revenue grew by 8.0% yoy to `625cr and the BOT segment witnessed

21.3% growth to `257cr. However, Surat Dahisar and Bharuch Surat are

expected to face muted traffic growth for the next one year, owing to traffic

diversion. On the EBITDAM front, IRBs margin came in at 44.9%, higher than ourestimate of 42.2%. Depreciation came in at `102cr, in-line with our estimate.

Interest cost came in at `150cr, registering a jump of 7.3%/5.6% on a yoy/qoq

basis. At the earnings front, IRB reported growth of 17.1% to `120cr, above our

estimate of `104cr on account of better-than-expected performance on the

EBITDAM front.

Outlook and valuation: IRB has a robust order book of `6,467cr (2.8x FY2012E&C revenue, excluding O&M orders), which lends revenue visibility. For FY2013,

NHAI has a target of 8,800km, which it intends to award during the year. This is

likely to translate into ~`80,000cr plus opportunity for developers. IRB is currently

pre-qualified to submit bids for projects worth `36,000cr and is targeting order

inflow of `3,000cr-4,000cr over FY2013. Hence, we maintain our Buy view onthe stock with a target price of `166.Key financials (Consolidated)Y/E March (` cr) FY2011 FY2012 FY2013E FY2014ENet sales 2,438 3,131 3,821 4,582% chg 43.0 28.4 22.1 19.9

Adj. net profit 452 496 498 563% chg 17.4 9.6 0.5 13.0

EBITDA (%) 44.9 43.9 42.3 40.2

FDEPS (`) 13.6 14.9 15.0 16.9P/E (x) 8.9 8.1 8.1 7.2

P/BV (x) 1.7 1.4 1.2 1.1

RoE (%) 20.2 18.7 16.1 15.8

RoCE (%) 14.2 12.6 11.1 11.2

EV/Sales (x) 3.1 2.9 2.7 2.5

EV/EBITDA (x) 6.8 6.6 6.3 6.1

Source: Company, Angel Research

BUYCMP `121

Target Price `166

Investment Period 12 Months

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 67.6

MF / Banks / Indian Fls 8.7

FII / NRIs / OCBs 18.9

Indian Public / Others 4.8

Abs. (%) 3m 1yr 3yr

Sensex (7.5) (11.3) 40.5

IRB (29.1) (22.7) 20.6

Face Value (`)

BSE SensexNifty

Reuters Code

4,037

1.4

210/111

440,933

Infrastructure

Avg. Daily Volume

Market Cap (`cr)

Beta

52 Week High / Low

10

16,4204,966

IRBI.BO

IRB@IN

Nitin Arora022-39357800 Ext: 6842

[email protected]

IRB InfrastructurePerformance Highlights

4QFY2012 Result Update | Infrastructure

May 10, 2012


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4QFY2012 Result Update | India Research

May 10, 2012 2

Exhibit 1:4QFY2012 performance (Consolidated)

Y/E March (` cr) 4QFY12 4QFY11 % chg(yoy) 3QFY12 % chg(qoq) FY2012 FY2011 % chg(yoy)Income from operations 848 767 10.6 745 13.8 3,131 2,438 28.4Total expenditure 467 452 3.3 404 15.7 1,757 1,344 30.7Operating profit 381 315 21.0 342 11.5 1,373 1,094 25.6OPM (%) 44.9 41.0 390bp 45.8 (90)bp 43.9 44.9 (100)bp

Interest 150 140 7.3 142 5.6 551 357 54.1

Depreciation 102 59 73.0 72 40.3 297 225 31.8

Non operating income 33 23 45.0 34 (1.7) 125 64 94.2

Nonrecurring items/Dividend from SPV's - - - - - - - -

PBT 163 139 16.9 161 0.9 651 576 13.1Tax 45 34 29 155 112 38.9

PAT 117 105 11.3 132 (11.1) 496 464 6.9Share of profits/ (losses) of asso. - - - - - - - -

Share of profits/ (losses) of MI (3) 3 (210.9) 1 (565.5) 0 12 -

PAT after MI and share of asso. 120 103 17.1 131 (8.4) 496 452 9.6PAT (%) 14.2 13.4 80bp 17.6 (340)bp 15.8 18.6 (280)bp

FDEPS (`) 3.6 3.1 17.1 4.0 (8.4) 14.9 13.6 9.6Source: Company, Angel Research

Exhibit 2:Segmental revenue break-up

Particulars 4QFY12 4QFY11 % chg 3QFY12 % chg FY2012 FY2011 % chgE&C Segment 625 578 8.0 526 18.8 2,275 1,670 36.2

BOT Segment 257 211 21.3 253 1.2 981 832 17.9Total Revenue 881 790 11.6 779 13.1 3,256 2,503 30.1E&C Segment 186 146 27.7 147 26.9 625 427 46.6

BOT Segment 227 192 18.6 229 (0.6) 869 728 19.3

EBITDA 414 338 22.5 375 10.2 1,495 1,155 29.4E&C Segment (%) 29.9 25.2 470bp 27.9 200bp 27.5 25.5 200bp

BOT Segment (%) 88.5 90.6 (210)bp 90.2 (170)bp 88.6 87.5 (110)bp

EBITDAM (%) 46.9 42.7 420bp 48.2 (130)bp 45.9 46.2 (30)bpE&C Segment 43 25 71.5 32 36.0 133 52 153.3

BOT Segment 106 115 (7.3) 110 (3.5) 413 302 37.1

Financial Expenses 150 140 7.0 142 5.3 546 354 54.4E&C Segment 15 15 2.9 14 6.8 57 52 9.6

BOT Segment 86 44 96.8 58 48.6 240 173 38.5

Depreciation & Amortization 102 59 73.0 72 40.3 297 225 31.8E&C Segment 128 106 20.8 101 26.9 435 322 35.2

BOT Segment 35 33 4.5 60 (42.6) 216 254 (14.9)

PBT 163 139 16.9 161 0.9 651 576 13.1E&C Segment 87 73 19.0 69 26.3 299 224 33.1

BOT Segment 33 29 12.5 57 (42.1) 185 228 (18.8)

PAT 120 103 17.1 126 (4.6) 484 452 7.0Source: Company, Angel Research


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May 10, 2012 3

Exhibit 3:4QFY2012 Actual vs. Angel estimates

Parameter (` cr) Estimates Actual Variation (%)Revenue 829 848 2.2

EBITDA 350 381 8.7Interest 145 150 3.4

PBT 140 163 16.5

Tax 36 45 25.8

PAT 104 120 16.2


Decent momentum at the revenue front continues

IRBs top line witnessed 10.6% yoy growth to `848cr, marginally ahead of our

estimate of `829cr, owing to higher-than-expected E&C income from under-

construction projects (Jaipur Deoli ~`235cr, Talegaon Amravati ~`130cr,Amritsar Pathankot ~`130cr and Tumkur Chitradurga ~`120cr). The E&C

segment reported yoy growth of 8.0% to `625cr (including other income of `24cr),

against our expectation of `569cr. Our assumption was based on the completion

of IRBs two projects (Surat Dahisar and Kolhapur projects), which were

contributing significantly to E&C revenue. However, IRB managed to cover up with

faster-than-expected execution for its under-construction projects. On the BOT

front, IRB reported 21.3% yoy jump to `257cr (including other income of `9cr),

against our estimate of `260cr.

Under-construction/development projects update

Completion achieved by IRB on various under-construction projects is as following:

Jaipur Deoli 55%; Talegaon Amravati 55%; Amritsar Pathankot 40%; and

Tumkur Chitradurga 30%. Further, as per management, the above mentioned

projects are progressing as per schedule and IRB expects to achieve on-time

completion for these projects.

IRBs current ECB exposure is ~`600cr (at LIBOR +4.25%), which is un-hedged.

This amount is allocated as follows: Tumkur-Chitradurga `300cr; Pathankot-

Amritsar `150cr; and Jaipur-Deoli `150cr.

For the cancelled Goa Karnataka project, IRB has filed for claims with NHAI and is

hopeful of receiving the same. Further, the company has incurred cost of

`12cr-15cr for the project.

Ahmedabad Vadodara: IRB achieved financial closure (FC) for this project inFebruary 2012 by tying up of project finance of `3,300cr. The total cost of this

project is `4,880cr, out of which equity contribution by the company will be

~`1,580cr and the remaining will be funded through project finance of `3,300cr.

Out of this project finance, ~`1,100cr can be drawn as ECB and the remaining

`2,200cr as Rupee Term Loan. The weighted average blended cost of this project

finance is ~10.5% p.a. However, there has been a delay in the appointed date to

be given by NHAI for Ahmedabad Vadodara and it is now expected by June 2012

end, as against earlier expectations of April 2012.


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May 10, 2012 4

Exhibit 4:Revenue growth in-line with expectation


Exhibit 5:Segmental break-up of revenue (` cr)


BOT toll revenue

On the toll collection front, for 4QFY2012, Surat Dahisar, Mumbai Pune and

Bharuch Surat projects witnessed 8.5%, 23.9% and 6.6% growth in toll revenue on

a yoy basis, respectively. Overall, on the toll collection front, IRB has achieved yoy

growth of 27.6% and 27.4% for 4QFY2012 and FY2012, respectively. Gross toll

collections for IRBs portfolio currently stand at `3.6cr/day.

As per management, substantial flyover construction happening on the Thane-

Ghodbunder adjoining road has resulted in traffic diversion, leading to lower

traffic growth on Surat-Dahisar and Bharuch Surat projects. Further, this diversion

will continue for the next one year.

As per media reports, Kolhapur project was facing protest by local people against

tolling; however, as per IRB, tolling on the project is expected to start from next

month once 95% completion certificate is provided to the state government.

Exhibit 6:Road BOT project-wise toll revenue growth

Project Name 4QFY12 4QFY11 % chg 3QFY12 % chg(qoq) FY2012 FY2011 % chg(yoy)Surat Dahisar BOT Project^ 107 98 8.5 106 0.2 401 365 9.9

Mumbai Pune BOT Project 99 80 23.9 100 (0.6) 398 322 23.7

Thane Bhiwandi Bypass 4 Lane BOT Project 17 15 10.7 16 4.4 63 54 15.3

Thane Ghodbunder BOT Project 8 7 5.4 8 4.0 29 28 2.8

Pune Nashik BOT Project 6 6 5.5 6 - 23 21 7.1

Pune Sholapur BOT Project 4 4 4.8 4 4.8 17 14 16.7

Nagar Karmala Tembhurni BOT Project 4 4 (5.4) 4 - 14 15 (2.7)

Mohol Mandrup Kamtee BOT Project 2 2 - 2 10.5 8 8 2.6

Kharpada Bridge BOT Project 2 2 4.8 2 10.0 8 7 13.5

Bharuch Surat BOT Project $ 37 35 6.6 37 0.5 143 130 9.8

Kaman Paygaon BOT Project ** - - - - - - - -

Khambatki Ghat BOT Project * - - - - - - - -

Tumkur Chitradurga# 38 - - 38 (0.8) 126 - -

Total 323 254 27.6 322 0.3 1,229 964 27.4Source: Company, Angel Research; Note: * Concession period of Khambatki Ghat BOT project ended on May 3, 2009, ^ Surat-Dahisar commissioned onFebruary 20, 2009, $ Bharuch Surat BOT project commissioned on September 25, 2009, ** Kaman-Paygaon BOT project concession period stopped from

November 22, 2009, # Tumkur Chitradurga Project commissioned on June 4, 2011

80.0 76.5 81.1

56.3

23.6

37.8

54.452.9

56.5

50.1

11.5 10.6

-

10.0

20.0

30.0

40.0

50.060.0

70.0

80.0

90.0

0.0

100.0

200.0

300.0

400.0

500.0600.0

700.0

800.0

900.0

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

Net Sa les (` cr, LHS) Growth (yoy %, RHS)

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

E&C BOT


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May 10, 2012 5

Higher-than-expected EBITDAM drives earnings growth

During the quarter, IRBs EBITDA margin came in at 44.9%, higher than our

estimate of 42.2%. The E&C segment posted EBITDA margin of 29.9% for the

quarter, which was boosted by higher other income (`24cr) and earthwork

undertaken in Tumkur Chitradurga project, which requires less material. On the

BOT front, the company reported EBITDAM of 88.5%, registering a decline of

210bp yoy.

Depreciation came in at `102cr, in-line with our estimate. Interest cost came in at

`150cr, registering a jump of 7.3%/5.6% on a yoy/qoq basis. At the earnings

front, IRB reported growth of 17.1% to `120cr, above our estimate of `104cr on

account of better-than-expected performance on the EBITDAM front.

Exhibit 7:EBITDAM higher than industry average


Exhibit 8:Better-than-expected show at the PAT level


45.3

51.2 54.548.3

44.848.2

43.941.0 41.1

43.745.8 44.9

-

10.0

20.0

30.0

40.0

50.0

60.0

-

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

EBITDA (` cr) EBITDAM (%, RHS)

19.7 19.921.1

28.2

22.9

20.2 19.9

13.4

16.715.0

17.6

14.2

-

5.0

10.0

15.0

20.0

25.0

30.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

PAT (` cr, LHS) PATM (%, RHS)


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May 10, 2012 6

Acquisition of MVR Infra for `128cr

IRB has decided to acquire 100% stake in road BOT firm MVR Infrastructure and

Tollways (MVR) in Tamil Nadu for about `128cr. The transaction (over three

tranches) is expected to be completed in the next three months.

Exhibit 9:Project details

Omallur-Salem-NamakkalLength (Km) 69

State Tamil Nadu

Status Operational

Concession period (years) 20

Construction period (years) 2.5

Concession signing date 16-Feb-06

Toll collection start Aug-09

Balance concession period (years) 14.5

TPC (`cr) 308

Equity (`cr) 69

Debt (`cr) 239

Revenue per day (` lakhs) 16

Negative grant payable over FY2014-19 (`cr) 100

Premium payable to NHAI (% of revenue) 22.4


The rationale behind the acquisition of this project is IRBs strategy to grow

inorganically. As per the company, equity IRRs in new project wins are worth16-18%, owing to aggressive competition witnessed in the road sector. Hence, the

company has acquired an operational BOT project where IRB is expecting equity

IRRs of ~21% based on the following assumptions: 1) inflation: 6.3% (throughout

the concession period); 2) traffic growth rate: up to FY2020 7.0% and

FY2021 onwards 6.0%; and 3) interest cost: FY2013-14 12.0% and FY2015

onwards 11.75%. IRB is confident that by financial reengineering, the projects

interest cost will come down by ~200bp.

Revenue from the project stood at `18.6cr and `42.4cr for FY2010 and FY2011,

respectively. On the earnings front, this project reported loss of `33.3cr and

`30.0cr for FY2010 and FY2011, respectively.

Our take: We believe that although prima facie the acquisition of this project ispositive for IRB, we have not factored the same in our SOTP valuation and would

wait for more clarification from the company.

Outlook and valuation

IRB has a robust order book of `6,467cr (2.8x FY2012 E&C revenue, excluding

O&M orders), which lends revenue visibility. For FY2013, NHAI has declared an

outlay of 8,800km, which it intends to award during the year. This is likely to

translate into ~`80,000cr plus opportunity for developers. IRB is currentlypre-qualified to submit bids for projects worth `36,000cr and is targeting order

inflow of `3,000cr-4,000cr over FY2013. Hence, we maintain our Buy view on thestock with a target price of `166.


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May 10, 2012 7

Exhibit 10:SOTP break-upBusiness Segment Methodology ` cr IRB's stake (%) `/share % to Target Price4 BOT Projects NPV 228 100 6.9 4.1

Kharpada Bridge BOT Project NPV 19 100 0.6 0.3Nagar-Karmala Tembhurni BOT Project NPV 54 100 1.6 1.0

Mohol-Mandup-Kamtee BOT Project NPV 37 100 1.1 0.7

Pune-Solapur BOT Project NPV 63 100 1.9 1.1

Pune-Nashik BOT Project NPV 162 100 4.9 2.9

Mumbai-Pune BOT Project NPV 905 100 27.2 16.4

Thane Ghodbunder BOT Project NPV 196 100 5.9 3.6

Surat Dahisat BOT Project NPV 93 90 2.5 1.5

Bharuch-Surat BOT Project NPV 71 100 2.1 1.3

IRDP Kolhapur NPV 376 100 11.3 6.8

Pathankot-Amritsar NPV 207 100 6.2 3.7

Jaipur Deoli NPV 400 100 12.0 7.2

Talegaon-Amravati NPV 106 100 3.2 1.9

Tumkur-Chitradurga NPV 124 100 3.7 2.2

Ahmedabad Vadodara NPV (896) 100 (27.0) (16.2)

Total Road BOT Asset Portfolio Valuation 64.2Modern Road Makers Pvt.Ltd 4 EV/EBITDA 2,552 76.8 46.2Land Parcel Valuation 1x Book Value 125 66 3.7 2.2

Sindhudurg Airport Project 1x Book Value 15

0.7 0.4

Net standalone cash adj for adv. to subs 696

20.9 12.6Total 166.3 100.0


Exhibit 11:Key assumptions

Project 4 BOTProjects Kharpada NKT MMK Pune-Solapur Pune-Nashik Mumbai-Pune ThaneGhod Bharuch-Surat SuratDahisat IRDPKolhapur Pathankot-Amritsar JaipurDeoli Talegaon-Amravati Tumkur-Chitradurga A'badBarodaStatus Oper. Oper. Oper. Oper. Oper. Oper. Oper. Oper. Oper. Under Dev. Under Dev. Under Dev. Under Dev. Under Dev. Under Dev. Under Dev.

KM 24 1 60 33 26 30 206 15 65 240 50 102 146 67 114 102

Issuing Auth. PWD MORTH PWD PWD MORTH MORTH MSRDC MSRDC NHAI NHAI MSRDC NHAI NHAI NHAI NHAI NHAI

State Mah. Mah. Mah. Mah. Mah. Mah. Mah. Mah. Gujarat Guj./Mah Mah. Punjab Rajasthan Mah. Karnataka Gujarat

Concession (Yrs) 18.5 17.8 15.0 16.0 16.0 18.0 15.0 15.0 15.0 12.1 30.0 20.0 25.0 22.0 26.0 25.0

Con. Start Jan-99 Nov-97 Nov-01 May-02 Mar-03 Sep-03 Aug-04 Dec-05 Jan-07 Feb-09 Jan-09 Apr-10 Apr-10 Apr-10 Jun-11 Apr-12

Con. End May-17 Aug-15 Dec-16 May-18 Mar-19 Sep-21 Aug-19 Dec-20 Jan-22 Mar-21 Jan-39 Mar-30 Mar-35 Mar-32 May-37 Apr-37

TPC (` cr) 104 32 37 18 63 74 1,292 249 1,470 2,535 430 1,442 1,705 885 1,142 4,920

Equity (` cr) 34 10 15 7 18 6 105 32 198 785 172 391 499 194 311 1,420

Debt (` cr) 70 22 22 11 45 68 1,187 217 1,272 1,750 258 924 900 475 831 3,500

Grant (` cr) - - - - - - - - - - (27.0) 126.9 306.0 216.0 140.4 -

Traffic Grth (%) 7% 5% 4% 5% 2% 7% 5% 7% 7% 6% 7% 7% 7% 7% 7% 7/6/5%

Toll inc (%) 5% 0% 5% 5% 3% 5% #18% 3% 5% 5% 5% 5% 5% 5% 5% 5%

Int Rate (%) - - - - - - 10.6% - 10.8% 10.8% 11.5% 10.5% 10.5% 10.5% 10.8% 10.5%

Source: Company, Angel Research, Note: #Once in three years; $ IRB had shared 38% of its FY2011 revenue with NHAI and the same increases by 1%

every year; @ IRB is expected to pay a sum of`309.6cr to NHAI from FY2013 and the sum increases by 5% every year


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May 10, 2012 8

Exhibit 12:Angel EPS forecast vs. consensus

Angel forecast Bloomberg consensus Variation (%)FY2013E 15.0 15.8 (5.0)

FY2014E 16.9 16.0 5.6Source: Company, Angel Research

Investment arguments

Integrated business model: IRBs integrated business model ensures the timelycompletion of projects, reduces its reliance on subcontractors and controls costs.

Further, it allows capturing the entire value in the BOT development business,

including EPC margins, developer returns and operation and maintenance (O&M)

margins.

OB/Sales provide good revenue visibility: IRB achieved its yearly order inflowguidance by winning the Ahmedabad Vadodara project and is staying away from

current competition. The order book of `6,467cr, excluding O&M orders (2.8x

FY2012 E&C revenue), lends good revenue visibility for the next few years.

Negligible dependence on capital markets: IRBs internal accruals/support

(cash flows from the E&C and BOT segments) would substantially fund equity

requirement of its current portfolio. Further, the company would be able to keep its

debt-equity position within reasonable limits.

Concerns

Delay in order awarding: IRB, being a road-focused player, is dependent on NHAIfor road awarding activity. Thus, any slowdown from NHAIs end would affect IRBs

order inflow. However, given the huge bidding pipeline of NHAI, IRB should

perform well, as it is one of the market leaders.Interest rate: BOT projects are inherently high-leverage projects. Hence, IRBsbusiness model is vulnerable to interest rate fluctuations, and any hike in interest

rates could increase the companys interest costs.

Commodity risks: Road players are facing pressures from the recent price inflationin commodities such as cement and steel, which directly affect margins.


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May 10, 2012 9

Exhibit 13:Recommendation summary

Company CMP TP Rating Top-line (` cr) EPS (`) Adj. P/E OB/FY12E FY13E FY14E CAGR (%) FY12E FY13E FY14E CAGR (%) FY12E FY13E FY14E Sales(x)

ABL 195 302 Buy 1,522 2,014 2,294 22.7 18.0 28.4 30.8 30.8 10.8 6.9 6.3 4.2CCCL 15 - Neutral 2,145 2,526 2,792 14.1 (1.1) 1.8 2.8 - - 8.0 5.2 2.7

HCC 18 - Neutral 3,988 4,239 4,522 6.5 (3.7) (1.8) (0.8) - - - - 3.8

IRB Infra 121 166 Buy 3,131 3,821 4,582 21.0 14.9 15.0 16.9 6.5 8.1 8.1 7.2 -IVRCL 169 265 Buy 5,606 6,619 7,925 18.9 25.6 22.0 26.7 2.1 6.6 7.7 6.3 4.3

JP Assoc. 53 79 Buy 5,057 5,758 6,860 16.5 2.0 4.7 6.0 72.7 26.2 11.3 8.8 4.4

Punj Lloyd 60 104 Buy 13,963 16,017 18,359 14.7 2.9 4.2 5.0 30.9 20.6 14.4 12.0 -

NCC 1,156 1,641 Buy 53,779 60,258 69,900 14.0 63.5 70.7 76.2 9.5 18.2 16.4 15.2 3.3

Sadbhav 48 84 Buy 1,952 2,503 2,903 21.9 4.4 5.8 6.5 21.8 10.9 8.3 7.3 3.8

Simplex In. 37 76 Buy 4,946 5,790 7,022 19.1 1.4 3.5 5.4 97.6 27.0 10.7 6.9 4.3

Patel Engg 93 - Neutral 3,573 3,609 3,836 3.6 14.9 14.0 14.5 (1.1) 6.3 6.6 6.4 2.7

Madhucon 45 - Neutral 10,557 11,592 12,993 10.9 2.8 1.8 3.2 7.2 16.3 24.8 14.2 2.6

L&T 133 199 Buy 2,604 2,989 3,314 12.8 9.3 10.2 11.3 10.5 14.4 13.1 11.8 2.7

ITNL 215 316 Buy 5,929 6,732 7,902 15.4 19.6 27.2 35.1 33.9 11.0 7.9 6.1 2.9


Exhibit 14:SOTP break-up

Company Core Const. Real Estate Road BOT Invst. In Subsidiaries Others Total` % to TP ` % to TP ` % to TP ` % to TP ` % to TP `

ABL 128 42 - - 174 58 - - - - 302

CCCL 20 100 - - - - - - - - 20HCC (5) (20) 12 50 16 70 - - - - 23

IRB Infra 98 59 - - 64 39 4 3 - - 166ITNL 53 20 - - 180 68 - - 33 12 265

IVRCL 54 69 - - - - 25 31 - - 79

JP Assoc. 34 32 27 26 - - - - 43 42 104

L&T 1,296 79 - - - - 344 21 - - 1,641

Madhucon 33 39 2 2 50 59 - - - 84

NCC 43 57 2 2 10 13 - - 22 28 76

Patel Engg 55 51 17 16 16 15 - - 19 18 106

Punj Lloyd 72 100 - - - - - - - - 72

Sadbhav 102 51 - - 98 49 - - - - 199

Simplex In. 316 100 - - - - - - - - 316



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May 10, 2012 10

Profit & loss statement (Consolidated)

Y/E March (` cr) FY2009 FY2010 FY2011 FY2012 FY2013E FY2014ENet Sales 992 1,705 2,438 3,131 3,821 4,582Other operating income - - - - - -Total operating income 992 1,705 2,438 3,131 3,821 4,582% chg 35.4 71.9 43.0 28.4 22.1 19.9

Total Expenditure 554 906 1,344 1,757 2,205 2,739Net Raw Materials 305 450 413 639 1,127 1,459

Other Mfg costs 57 65 88 163 237 272

Personnel 134 284 722 905 631 756

Other 58 106 122 97 210 252

EBITDA 437 799 1,094 1,373 1,616 1,843% chg 6.2 82.7 36.9 25.6 17.7 14.0

(% of Net Sales) 44.1 46.9 44.9 43.9 42.3 40.2

Depreciation& Amortisation 114 182 225 297 455 545

EBIT 323 617 869 1,076 1,161 1,297% chg 4.1 91.0 40.7 23.9 7.9 11.7

(% of Net Sales) 32.6 36.2 35.6 34.4 30.4 28.3

Interest & other Charges 138 249 357 551 587 642

Other Income 30 49 64 125 99 105

(% of PBT) 13.8 11.7 11.2 19.2 14.7 13.8

Share in profit of Associates - - - - - -

Recurring PBT 215 417 576 651 674 761% chg 29.1 93.8 38.2 13.1 3.4 13.0

Extraordinary Expense/(Inc.) - - - - - -

PBT (reported) 215 417 576 651 674 761Tax 38 13 112 155 175 198

(% of PBT) 17.6 3.2 19.4 23.8 26.0 26.0

PAT (reported) 177 403 464 496 498 563Add: Share of earnings of asso. - - - - - -

Less: Minority interest (MI) 1.3 17.9 11.7 - - -

Prior period items - - - - - -

PAT after MI (reported) 176 385 452 496 498 563ADJ. PAT 176 385 452 496 498 563% chg 54.4 119.2 17.4 9.6 0.5 13.0(% of Net Sales) 17.7 22.6 18.6 15.8 13.0 12.3

Basic EPS (`) 5.3 11.6 13.6 14.9 15.0 16.9Fully Diluted EPS ( ) 5.3 11.6 13.6 14.9 15.0 16.9% chg 26.6 119.2 17.3 9.6 0.5 13.0


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May 10, 2012 11

Balance sheet (Consolidated)

Y/E March (` cr) FY2009 FY2010 FY2011 FY2012E FY2013E FY2014ESOURCES OF FUNDSEquity Share Capital 332 332 332 332 332 332Preference Capital - - - - - -

Reserves& Surplus 1,398 1,708 2,100 2,537 2,975 3,479

Shareholders Funds 1,730 2,040 2,433 2,869 3,308 3,811Minority Interest 60 78 90 90 90 90

Total Loans 2,486 2,915 4,626 6,949 7,533 8,384

Deferred Tax Liability 18 27 23 23 23 23

Total Liabilities 4,294 5,060 7,171 9,931 10,954 12,308APPLICATION OF FUNDSGross Block 2,460 4,019 4,132 7,397 7,397 7,397

Less: Acc. Depreciation 444 551 769 1,070 1,525 2,070

Net Block 2,016 3,467 3,362 6,327 5,872 5,327Capital Work-in-Progress 1,455 880 2,508 1,442 3,515 5,588

Goodwill - - - - - -

Investments 111 45 55 61 67 73Current Assets 1,033 1,148 2,038 2,937 2,673 2,772Cash 415 510 1,200 1,858 1,356 1,147

Loans & Advances 399 438 635 815 995 1,193

Other 218 199 203 264 322 432

Current liabilities 321 482 794 836 1,173 1,453

Net Current Assets 712 666 1,244 2,100 1,499 1,319Misc. Exp. not written off 1 1 1 1 1 1

Total Assets 4,294 5,060 7,171 9,931 10,954 12,308


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May 10, 2012 12

Cash flow statement (Consolidated)Y/E March (` cr) FY2009 FY2010 FY2011 FY2012E FY2013E FY2014EProfit before tax 215 417 564 651 674 761

Depreciation 114 182 225 297 455 545Change in Working Capital 120 (141) (112) 198 (99) 29

Less: Other income 30 49 64 125 99 105

Direct taxes paid 38 13 112 155 175 198

Cash Flow from Operations 142 677 725 469 953 975(Inc.)/ Dec. in Fixed Assets (807) (984) (1,741) (2,198) (2,073) (2,073)

(Inc.)/ Dec. in Investments 87 66 (10) (6) (6) (7)

Other income 30 49 64 125 99 105

Cash Flow from Investing (690) (869) (1,687) (2,078) (1,980) (1,975)Issue of Equity (1) - (0) - - -

Inc./(Dec.) in loans 465 429 1,710 2,323 585 851

Dividend Paid (Incl. Tax) 65 76 60 60 60 60

Others 43 (66) 1 3 - -

Cash Flow from Financing 441 288 1,652 2,267 525 791Inc./(Dec.) in Cash (107) 95 690 658 (502) (209)

Opening Cash balances 522 415 510 1,200 1,858 1,356Closing Cash balances 415 510 1,200 1,858 1,356 1,147


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May 10, 2012 13

Key RatiosY/E March FY2009 FY2010 FY2011 FY2012E FY2013E FY2014EValuation Ratio (x)P/E (on FDEPS) 23.0 10.5 8.9 8.1 8.1 7.2P/CEPS 13.9 7.1 6.0 5.1 4.2 3.6

P/BV 2.3 2.0 1.7 1.4 1.2 1.1

Dividend yield (%) 1.2 1.2 1.6 1.6 1.6 1.6

EV/Sales 6.2 3.8 3.1 2.9 2.7 2.5

EV/EBITDA 14.0 8.1 6.8 6.6 6.3 6.1

EV / Total Assets 1.4 1.3 1.0 0.9 0.9 0.9

Per Share Data (`)EPS (Basic) 5.3 11.6 13.6 14.9 15.0 16.9

EPS (fully diluted) 5.3 11.6 13.6 14.9 15.0 16.9

Cash EPS 8.7 17.1 20.4 23.9 28.7 33.4

DPS 1.5 1.5 2.0 2.0 2.0 2.0

Book Value 52.1 61.4 73.2 86.3 99.5 114.7

DuPont AnalysisEBIT margin 32.6 36.2 35.6 34.4 30.4 28.3

Tax retention ratio 82.4 96.8 80.6 76.2 74.0 74.0

Asset turnover (x) 0.3 0.4 0.5 0.4 0.4 0.4

ROIC (Post-tax) 7.6 14.2 13.3 11.7 9.7 9.2

Cost of Debt (Post Tax) 5.0 8.9 7.6 7.2 6.0 6.0

Leverage (x) 1.1 1.2 1.3 1.6 1.8 1.9

Operating ROE 10.3 20.4 20.6 18.7 16.5 15.4

Returns (%)ROCE (Pre-tax) 8.1 13.2 14.2 12.6 11.1 11.2

Angel ROIC (Pre-tax) 13.8 20.3 24.4 21.3 18.3 22.3

ROE 10.5 20.4 20.2 18.7 16.1 15.8

Turnover ratios (x)Asset Turnover (Gross Block) 0.4 0.5 0.6 0.5 0.5 0.6

Inventory / Sales (days) 47 40 25 22 22 22

Receivables (days) 5 5 5 5 6 8

Payables (days) 77 58 87 96 93 104

W.cap cycle (ex-cash) (days) 87 48 15 17 18 13

Solvency ratios (x)Net debt to equity 1.2 1.2 1.4 1.8 1.9 1.9

Net debt to EBITDA 4.7 3.0 3.1 3.7 3.8 3.9

Interest Coverage 2.3 2.5 2.4 2.0 2.0 2.0


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Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

DISCLAIMERThis document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment

decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should makesuch investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies

referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and

risks of such an investment.

Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make

investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this

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Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. WhileAngel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,compliance, or other reasons that prevent us from doing so.

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Disclosure of Interest Statement IRB Infra

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to 15%) Sell (< -15%)

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