IRB Infra Developers hits 52-week high; stock zooms 84% in one month

Shares of IRB Infrastructure Developers gained 3 per cent and hit a 52-week high of Rs 121.50 on the BSE on Thursday on expectations that earnings may improve going forward as road traffic reaches over 80 per cent of pre-Covid level.

The stock of the company, which is the largest private roads and highways infrastructure developer in India, has surpassed its previous 52-week high of Rs 119.70 touched on January 21, 2020. In the past one month, it has zoomed 84 per cent as compared to 7.6 per cent rise in the S&P BSE Sensex.

According to the management, the company witnessed a strong uptick in collections being clocked for its assets towards end of February 2020, which is indicative of the demand scenario in India. The same is also reflected in the rebound being witnessed in traffic as the country is opening up in phases.

“We are back to over 80 per cent of pre-Covid level traffic for our portfolio, even when many cities or state sections are not allowing traffic movement freely, and expect to reach pre-Covid collections in the coming months,” Virendra D. Mhaiskar, chairman and managing director of IRB Infra said in the annual report for 2019-20.

Further, out of the 9 projects in Private InvIT, 5 projects are under construction - all being 4 to 6 laning assets. "Four of these will be completed in FY21, resulting in over 45 per cent jump in tariffs on completion. This will provide a strong boost in collections and facilitate operations," Mhaiskar said.

With the transfer of 9 projects, their corresponding operation & maintenance (O&M) now becomes a part of the company’s order book – which has increased to Rs 12,000 crore, ensuring strong visibility for the engineering, procurement, construction (EPC) segment for foreseeable future.

Besides, the management believes that the company is well poised and geared up to win a large number of build, operate & transfer (BOT) projects in the upcoming bids, which will ensure a steady growth in execution as well as Toll revenues in the long term.