IRB Infra, 1Q FY 14

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

Quarterly highlights - ConsolidatedY/E March (` cr) 1QFY14 1QFY13 4QFY13 % chg (yoy) % chg (qoq)Net sales 1,033 980 948 5.4 8.9Op. profit 455 425 423 6.9 7.6

Net profit 135 142 151 (5.1) (11.0)Source: Company, Angel Research

For 1QFY2014, IRB Infrastructure (IRB) reported a healthy set of numbers which are

above our expectations. The companys revenue came in above our expectation

owing to healthy execution pace from its under-construction projects which led to

higher-than-expected bottom-line. In accordance with its strategy to declare ~20% ofpost-tax consolidated profit towards dividend, IRB declared an interim dividend of

`2/share during the quarter.

Strong performance continues: IRBs consolidated revenues stood at `1,033cr in1QFY2014 (against our estimate of`983cr), up 5.4% yoy. This was mainly due to

healthy execution pace from its under-construction projects. The E&C segment

reported a revenue of `778.5cr registering a growth of 3.7% yoy and the BOT

segment witnessed a growth of 8.3% yoy to `283.5cr. On the EBITDAM front,

IRBs margin increased by 63bp yoy to 44.1%; it however was slightly lower than

our estimate of 44.8%. Strong execution of its under-construction BOT projects led

to an EBITDAM of 30.7% (including other income) for the E&C segment. Interest

cost came in at`166cr, registering a jump of 7.8% on a yoy basis. At the earnings

front, IRB reported a decline of 5.5% yoy to`134cr against our estimate of`111cr

owing to better-than-expected execution performance during the quarter.

Outlook and valuation: IRB has a robust order book of `5,675cr (2.1x trailingE&C revenue, excluding O&M orders), which lends revenue visibility. IRB is

looking at both organic and inorganic options for growth with a threshold of 18%

equity IRR and intends to allot 20% of consolidated cash flow post debt repayment

towards acquisitions. The stock trades at FY2014E and FY2015E P/BV of 0.7x and

0.6x respectively. We maintain our Buy view on the stock with a target price of `106.Key financials (Consolidated)Y/E March (` cr) FY2012 FY2013 FY2014E FY2015ENet Sales 3,133 3,687 3,805 4,248% chg 28.5 17.7 3.2 11.6

Adj.Net Profit 496 557 498 524% chg 9.6 12.2 (10.6) 5.3

EBITDA (%) 43.7 44.3 45.1 45.3

FDEPS (`) 14.9 16.7 15.0 15.8P/E (x) 4.7 4.2 4.7 4.5

P/BV (x) 0.8 0.7 0.7 0.6

RoE (%) 18.8 18.2 14.5 13.9

RoCE (%) 12.4 10.7 9.2 8.7

EV/Sales (x) 2.4 2.6 2.8 3.1

EV/EBITDA (x) 5.6 5.9 6.3 6.8

OB/sales(x) 3.0 2.4 3.1 3.5

Order inflow (1,058) 2,595 3,384 3,574

%chg - - 30.4 5.6

Source: Company, Angel Research; Note CMP as of August 8,2013

BUYCMP `71

Target Price `106

Investment Period 12 Months

Stock Info

Sector

Net debt 8,025

Bloomberg Code

Shareholding Pattern (%)

Promoters 63.0MF / Banks / Indian Fls 3.8

FII / NRIs / OCBs 23.0

Indian Public / Others 10.2

Abs. (%) 3m 1yr 3yr

Sensex (6.0) 6.8 2.7

IRB (41.2) (40.4) (75.0)

Reuters Code IRBI.BO

IRB@IN

BSE Sensex 18,789

Nifty 5,566

Avg. Daily Volume 443,397

Face Value (`) 10

Beta 1.4

52 Week High / Low 161/52

Infrastructure

Market Cap (`cr) 2,355

Viral Shah022-39357800 Ext: 6842

[email protected]

IRB InfrastructurePerformance Highlights

1QFY2014 Result Update | Infrastructure

August 10, 2013

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IRB Infrastructure | 1QFY2014 Result Update

August 10, 2013 2

Exhibit 1:1QFY2014 performance (Consolidated)

Y/E March (` cr) 1QFY14 1QFY13 % chg(yoy) 4QFY13 % chg(qoq) FY2013 FY2012 % chg(yoy)Income from operations 1,033 980 5.4 948 8.9 3,687 3,134 17.7Total expenditure 578 554 4.2 525 9.9 2,054 1,764 16.5Operating profit 455 425 6.9 423 7.6 1,633 1,370 19.2OPM (%) 44.1 43.4 63bp 44.6 (53)bp 44.3 43.7 57bp

Interest 166 154 7.8 158 5.4 615 546 12.6

Depreciation 122 109 12.1 109 11.2 442 297 48.7

Non operating income 29 32 (9.9) 32 (8.0) 130 125 3.9

Nonrecurring items/Div. from SPV's - - - - - - - -

Profit Before tax 197 195 0.6 188 4.7 707 652 8.4Tax 62 56 34 153 155 (1.4)

PAT 134 140 (4.0) 154 (12.9) 554 497 11.4Share of Profits/ (Losses) of Asso. - - - - - - - -

Share of Profits/ (Losses) of MI (0) (2) (78.0) 3 (116.8) (3) 0 -

PAT after MI and Share of Assoc. 135 142 (5.1) 151 (11.0) 557 497 12.0PAT (%) 13.0 14.5 (149)bp 15.9 (76)bp 15.1 15.9 (76)bp

FDEPS (`) 4.0 4.3 (5.1) 4.5 (11.0) 16.7 15.0 12.0

Source: Company, Angel Research

Exhibit 2:Segmental revenue break-up (Consolidated)

Particulars 1QFY14 1QFY13 % chg 4QFY13 % chg FY2013 FY2012 % chgConstruction segment 778 750 3.7 691 12.7 2,729 2,277 19.8

BOT segment 283 262 8.3 289 (2.0) 1,088 981 11.0Total Income 1,062 1,012 4.9 980 8.4 3,817 3,258 17.2Construction segment 239 226 5.8 206 16.3 816 629 29.8

BOT segment 245 232 5.7 245 (0.1) 947 870 8.9

EBITDA 484 458 5.7 451 7.4 1,763 1,499 17.7Construction segment (%) 30.7 30.1 59bp 29.8 96bp 29.9 27.6 229bp

BOT segment (%) 86.5 88.6 (210))bp 84.8 (166)bp 87.0 88.7 (165)bp

EBITDAM (%) 45.6 45.2 (36) bp 46.0 (41)bp 46.2 46.0 20bpConstruction segment 61 60 1.8 56 8.3 238 136 74.3

BOT segment 105 94 11.7 97 7.7 377 414 (8.8)

Financial expenses 166 154 7.8 154 7.9 615 551 11.8Construction segment 12 13 (4.9) 14 (12.8) 54 57 (5.6)

BOT segment 110 96 14.3 96 14.7 387 240 61.7

Depreciation & Amortisation 122 109 12.1 109 11.2 442 297 48.7Construction segment 166 153 8.2 135 22.7 524 435 20.5

BOT segment 31 42 (27.1) 52 (41.6) 182 216 (15.6)

PBT 197 195 0.6 188 4.7 707 651 8.5Construction segment 107 105 2.7 88 22.4 352 299 17.8

BOT segment 27 35 (23.9) 66 (59.8) 202 197 2.2

PAT after minority interest 134 140 (4.0) 154 (12.9) 554 496 11.6Source: Company, Angel Research

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August 10, 2013 3

Exhibit 3:1QFY2014 Actual vs Angel estimates

Parameter (` cr) Estimates Actual Variation (%)Revenue 983 1,033 5.0

EBITDA 441 455 3.3Interest 169 166 (1.7)

PBT 156 197 25.9

Tax 45 62 37.9

PAT 111 135 21.4


Strong execution continues

IRBs consolidated revenues stood at`1,033cr in 1QFY2014 (against our estimate

of`983cr), indicating a growth of 5.4% yoy. The growth was mainly due to healthy

execution pace in the under-construction BOT projects (Ahmedabad-Vadodara`550cr, Pathankot-Amritsar ~`75cr and Tumkur-Chitradurga ~`130cr). The

E&C segment reported a revenue of `778.5cr (our estimate was of `605cr)

registering a growth of 3.7% yoy. The BOT segment witnessed a growth of 8.3%

yoy to`283.5cr (our estimate was of`379cr) for 1QFY2014.

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

Jaipur-Deoli 100%; Talegaon-Amravati 100%; Pathankot-Amritsar 90%;

Ahmedabad-Vadodara 20% and Tumkur-Chitradurga 85%. During the

quarter, IRB has started partial toll collection for Talegaon-Amravati and expects to

start partial toll collection for Jaipur-Deoli by 2QY2014. The construction activity

on Pathankot-Amritsar and Tumkur-Chitradurga BOT projects is moving as perschedule.

Under-construction/development projects update

Kolhapur project: As per the Management, the State government has issued aprovisional certificate for IRDP-Kolhapur BOT project; however it is still awaiting to

commence toll collection on the project.

Surat-Dahisar: During the quarter, the company acquired the balance 10% equitystake in its IRB Surat Dahisar Tollway Pvt Ltd (IRBSD) for a total consideration

of `67cr. Accordingly, IRBSD has become a subsidiary of the company fromMay 16, 2013.

Ahmedabad-Vadodara: For 1QFY2014, the gross toll collection for the projectstood at`28.8cr.

Goa-Kundapur: IRB has received LOA from NHAI and expect to achieve financialclosure within 3-4 months; once received, it would commence construction activity

on the project.

Sindhudurg airport project: IRB has got all the necessary clearances for agreenfield airport in Sindhudurg district in Maharashtra and expects the

construction to start soon. The total project cost is estimated to be `350cr and theEPC contract for the project has been awarded to L&T. The project has a

concession period of 95 years which includes 18 months of construction period.

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August 10, 2013 4

Exhibit 4:Strong performance continues


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


BOT toll revenue

On the toll collection front, for 1QFY2014, Surat-Dahisar, Mumbai-Pune and

Bharuch-Surat projects witnessed 10.2%, 5.2% and 5.5% growth in toll revenue on

a yoy basis, respectively. Adjusted for the hike in toll rates and ban in mining

activity, Bharuch-Surat and Tumkur-Chitradurga saw a decline in traffic growth for

the quarter. Overall, on the toll collection front, IRB reported a growth of

19.9% yoy to`399cr in 1QFY2014 with an average toll collection of `4.5cr/day

from its existing BOT portfolio.

IRB expects toll revenue to grow around 10-12% on a yearly basis as a result of

higher WPI and traffic growth.

Exhibit 6:Road BOT project-wise toll revenue growth

Project Name 1QFY14 1QFY13 % chg 4QFY13 % chg(qoq) FY2013 FY2012 % chg(yoy)Surat Dahisar BOT Project^ 117 106 10.2 120 (2.0) 444 401 10.8

Mumbai Pune BOT Project 109 104 5.2 104 5.0 416 398 4.7

Thane Bhiwandi Bypass 4 Lane BOT Project 18 17 7.0 18 1.7 69 63 9.4

Thane Ghodbunder BOT Project 9 8 8.9 8 7.5 31 29 6.5

Pune Nashik BOT Project 6 6 5.4 6 0.0 24 23 4.0

Pune Sholapur BOT Project 5 5 0.0 5 2.2 18 17 5.4

Nagar Karmala Tembhurni BOT Project 4 4 0.0 4 0.0 15 14 4.2

Mohol Mandrup Kamtee BOT Project 2 2 (19.0) 2 0.0 8 8 -5.1

Kharpada Bridge BOT Project 2 2 -4.2 2 4.5 9 8 2.4

Bharuch Surat BOT Project $ 40 38 5.5 44 (9.3) 161 143 12.7

Kaman Paygaon BOT Project ** 0 0 - 0 0.0 0 0 0.0

Khambatki Ghat BOT Project * 0 0 - 0 0.0 0 0 0.0

Tumkur Chitradurga# 39 41 -5.8 39 (1.3) 160 126 0.0

Ommalur -Salem- Namakkal #* 15 0 - 15 - 29 0 -

Ahmedabad-Vadodara (EW)# 29 0 - 29 - 29 0 -

Talegaon Amravati BOT Project $$ 5 0 - 0 - 0 0 -

Total 399 333 20 395 1 1411 1229 15Source: 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 fromNovember 22, 2009, # Tumkur- Chitradurga Project commissioned on June 4, 2011; #* Project acquired in October-2012 by purchase of 74% of equity

stake in the Project, #^ Toll Collection at Ahmeadba- Vadodara Expressway has been started from January 1, 2013, $$ Toll Collection at Talegaonmravati BOT Project has been started from 26th April 2013

746

851

980

845

914

948

1033

11.510.9

22.3

14.9

22.5

11.4

5.4

-

5.0

10.0

15.0

20.0

25.0

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

Net Sales (` cr, LHS) Growth (yoy %, RHS)

526

625

750

622

666

691

778

253

257

262

257

280

289

283

0

100

200

300

400

500

600

700

800

900


E&C ( ` cr) BOT (` cr)

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August 10, 2013 5

Impressive show on the EBITDA and earnings front

On the EBITDAM front, IRBs margin increase by 63bp yoy to 44.1%; it however

was slightly below our estimate of 44.8%. Further the E&C segment reported an

EBITDAM of 30.7% (including other income) led by strong execution of its under

construction BOT projects. The Management expects to maintain these margins

going ahead as well. On the BOT front, the company reported an EBITDAM of

86.5%, registering a decline of 210bp yoy.

Depreciation increased by 12.1% yoy to`122cr and was in-line with our estimate.

Interest cost came in at`166cr in 1QFY2014, up by 7.8%. At the earnings front,

IRB reported a decline of 5.5% yoy to`134cr against our estimate of`111cr owing

to better-than-expected revenue performance during the quarter.

Exhibit 7:EBITDA margin steady


Exhibit 8:Healthy performance on the earnings front


342

384

425

381

408

423

455

43.7

45.8

45.1

43.4

45.044.6

44.6

41.0

42.0

43.0

44.0

45.0

46.0

47.0

48.0

-

100

200

300

400

500


EBITDA (` cr), LHS) EBITDAM (%, RHS)

131

120

142

121

143

151

135

17.6

14.1 14.5

14.315.6 15.9

13.0

-

5.0

10.0

15.0

20.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0


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

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Outlook and valuation

Based on the current order book mix and 1QFY2014 performance we have

revised our estimates downwards for FY2014 and FY2015 respectively.

Exhibit 9:Change in estimates

FY2014E FY2015EEarlier Estimates Revised Estimates Variation (%) Earlier Estimates Revised Estimates Variation (%)

Revenues (`cr) 3,997 3,805 (4.8) 4,312 4,248 (1.5)

EBITDA Margins (%) 45.5 45.1 (0.9) 46.4 45.3 (2.4)

PAT (`cr) 522 498 (4.7) 553 524 (5.2)


In accordance with its strategy to declare ~20% of post-tax consolidated profit

towards dividend, IRB declared an interim dividend of`2/share during the quarter.

IRB has a robust order book of `5,675cr (2.1x trailing E&C revenue, excluding

O&M orders), which lends revenue visibility. Although a slowdown in order

awarding by NHAI in road sector has been witnessed in 1QFY2014, IRB expects

ordering activity to improve going ahead. IRB is currently pre-qualified to

submit bids for projects worth `30,619cr and is targeting order inflow of

`3,000cr-4,000cr over FY2014.

We have used the sum-of-the-parts (SOTP) method to value the stock. We valuethe construction business at a P/E of 4x FY2015E earnings and IRBs BOT projectson a DCF basis at a CoE of 14%. We have not included the Sindhudurg airportproject, real estate business and the 4-star hotel in Kolhapur in our SOTPvaluation. We maintain our Buy rating and target price of `106, indicating anupside of 50%.

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Exhibit 10:SOTP break-up

Particulars Segment Driver Multiple Value (` cr) Value pershare (`) Proportionatestake (%) BasisIRB's construction business Construction 246 4 983 30 27.8

P/E of 4x one year rolling

forward earningsTotal 983 30 27.8Road BOT projects

Thane Bhiwandi Bypass Toll 330 10 9.4 NPV at CoE of 14%

Kharpada Bridge Toll 29 1 0.8 NPV at CoE of 14%

Nagar - Karnala - Tembhurni Toll 59 2 1.7 NPV at CoE of 14%

Mohol - Mandrup - Kamtee Toll 46 1 1.3 NPV at CoE of 14%

Pune - Solapur Toll 103 3 2.9 NPV at CoE of 14%

Pune - Nashik Toll 152 5 4.3 NPV at CoE of 14%

Mumbai - Pune Toll 1,388 42 39.3 NPV at CoE of 14%

Thane Ghodbunder Toll 126 4 3.6 NPV at CoE of 14%

Surat Dahisar Toll 181 5 5.1 NPV at CoE of 14%Bharuch - Surat Toll 217 7 6.1 NPV at CoE of 14%

IRDP, Kolhapur Toll 150 5 4.2 NPV at CoE of 14%

Pathankot - Amritsar Toll 236 7 6.7 NPV at CoE of 14%

Talegaon - Amravati Toll 145 4 4.1 NPV at CoE of 14%

Jaipur- Deoli Toll 222 7 6.3 NPV at CoE of 14%

Tumkur - Chitradurga Toll 94 3 2.7 NPV at CoE of 14%

Ahmedabad- Vadodara Toll (358) (11) (10.1) NPV at CoE of 14%

Omallur Salem -Namakkal Toll 65 2 1.8 NPV at CoE of 14%

Goa/Karnataka Border to Kundapur Toll 164 5 4.6 NPV at CoE of 14%

Total 3,184 101 94.9Real Estate segment Real Estate 1,500 0 0 0 0.0 No value ascribed given thepending court case

Net debt (802) (24) (22.7) Standalone net debt

Grand Total 3,364 106 100.0Source: Company, Angel Research

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

IssuingAuth.

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 GujaratConcession(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 -

TrafficGrth (%)

5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 6/5%

Toll inc (%) 5% 0% 5% 5% 3% 5% #18% 5% 7/6/5% 5% 5% 5% 5% 5% 5% 5%

Int Rate (%) - - - - - - 10.6% - 10.8% 10.5% 11.5% 10.5% 10.5% 10.5% 10.5% 11.0%

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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August 10, 2013 8

Exhibit 12:Angel EPS forecast vs consensus

Angel forecast Bloomberg consensus Variation (%)FY2014E 15.0 15.9 (5.8)

FY2015E 15.8 17.6 (10.5)Source: 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: The order book of`5,675cr, excludingO&M orders (2.1x trailing E&C revenue), lends good revenue visibility for the next

few years.

Negligible dependence on capital markets: IRBs internal accruals (cash flows fromthe 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 pressure from the recent price inflationin commodities such as cement and steel, which directly affect margins.

Company backgroundIncorporated in 1998, IRB is the pioneer and one the largest players in the road

BOT business in India, with strong in-house integrated execution capabilities. IRBs

road business can be divided into two verticals: 1) engineering and construction

(E&C); and 2) toll collection and maintenance. The E&C arm complements its

BOT vertical, leading to time and cost control for projects in hand/under

development. The company also has one airport project, (the construction on

which has started), decent land bank; and one small wind mill project.

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Exhibit 13:Recommendation summary

Company CMP TP Rating Top-line (` cr) EPS (`) P/E OB/FY13 FY14E FY15E CAGR (%) FY13 FY14E FY15E CAGR (%) FY13 FY14E FY15E Sales(x)

ABL 46 60 Buy 1,853 1,912 2,131 7.2 5.3 5.0 5.5 1.3 8.6 9.1 8.4 2.2CCCL 7 - Neutral 1,931 2,281 2,492 13.6 (3.3) 0.7 2.0 - (2.0) 9.6 3.3 2.2

IRB Infra 71 106 Buy 3,687 3,805 4,248 7.3 16.7 15.0 15.8 (3.0) 4.2 4.7 4.5 2.1ITNL 120 156 Buy 6,645 7,423 7,970 9.5 26.8 30.3 31.9 9.2 4.5 4.0 3.8 2.2

IVRCL 11 - Neutral 3,759 5,673 5,892 8.4 (3.3) 1.4 1.8 - - 7.8 6.1 4.8

JP Assoc. 31 41 Buy 13,415 12,946 14,897 5.4 2.5 1.2 2.7 4.1 12.6 25.4 11.6 -

L&T 780 1,002 Buy 60,873 66,532 74,520 10.6 44.8 46.9 52.2 8.0 17.4 16.6 14.9 2.5

NCC 19 27 Buy 5,725 6,044 6,533 6.8 2.4 2.4 2.6 2.4 7.6 7.7 7.2 3.2

Punj Lloyd 24 - Neutral 11,408 12,726 14,226 11.7 (0.2) 0.9 1.0 - - 28.4 23.8 1.8

Sadbhav 71 100 Buy 1,811 2,462 2,731 22.8 0.9 5.9 6.7 177.2 82.1 12.1 10.7 5.6

Simplex In. 50 - Neutral 5,897 6,308 7,033 9.2 10.8 11.9 18.7 31.9 4.7 4.2 2.7 2.7

Unity Infra 20 - Neutral 2,040 2,146 2,339 7.1 12.5 11.0 11.5 (4.0) 1.6 1.8 1.7 1.6


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 18 30 - - 42 70 - - - - 60

CCCL 16 100 - - - - - - - - 16

IRB Infra 30 28 - - 76 72 - - - - 106ITNL 58 37 - - 98 63 - - - - 156IVRCL 9 31 - - - - 20 69 - - 29

JP Assoc. 15 37 15 37 - - - - 11 27 41

L&T 731 73 - - - - 271 27 - - 1,002

NCC 13 48 - - 7 26 - - 7 26 27

Punj Lloyd 44 100 - - - - - - - - 44

Sadbhav 47 33 - - 93 67 - - - - 139

Simplex In. 75 100 - - - - - - - - 75

Unity Infra 27 100 - - - - - - - - 27


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Profit & loss statement (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ENet Sales 1,705 2,438 3,133 3,687 3,805 4,248Other operating income - - - - - -Total operating income 1,705 2,438 3,133 3,687 3,805 4,248% chg 71.9 43.0 28.5 17.7 3.2 11.6

Total Expenditure 906 1,350 1,764 2,054 2,089 2,324R.M. consumed 450 413 639 470 438 510

Construction expenses 335 769 886 1,306 1,378 1,512

Employee expenses 71 93 138 156 156 174

SG&A 50 76 101 122 118 127

EBITDA 799 1,088 1,369 1,633 1,716 1,925% chg 82.1 36.2 25.8 19.3 5.1 12.1

(% of Net Sales) 46.9 44.6 43.7 44.3 45.1 45.3

Depreciation & Amortisation 182 225 297 442 530 639

EBIT 617 863 1,072 1,192 1,186 1,285% chg 90.2 39.8 24.3 11.1 (0.5) 8.4

(% of Net Sales) 36.2 35.4 34.2 32.3 31.2 30.3

Interest & other Charges 251 352 546 615 684 765

Other Income 51 64 125 130 133 149

(% of PBT) 12.2 11.2 19.2 18.4 21.0 22.2

Share in profit of Associates - - - - - -

Recurring PBT 417 576 651 707 635 669% chg 93.8 38.2 13.1 8.5 (10.1) 5.3

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

PBT (reported) 417 576 651 707 635 669Tax 13.3 111.7 155.2 153.0 137.5 144.8

(% of PBT) 3.2 19.4 23.8 21.7 21.7 21.7

PAT (reported) 403 464 496 554 498 524Add: Share of earnings of asso. - - - - - -

Less: Minority interest (MI) 17.9 11.7 0.0 (3.1) - -

Prior period items - - - - - -

PAT after MI (reported) 385 452 496 557 498 524ADJ. PAT 385 452 496 557 498 524% chg 119.2 17.4 9.6 12.2 (10.6) 5.3(% of Net Sales) 22.6 18.6 15.8 15.1 13.1 12.3

Basic EPS (`) 11.6 13.6 14.9 16.7 15.0 15.8Fully Diluted EPS (`) 11.6 13.6 14.9 16.7 15.0 15.8% chg 119.2 17.4 9.6 12.2 (10.6) 5.3

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August 10, 2013 11

Balance sheet (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015ESOURCES OF FUNDSEquity Share Capital 332 332 332 332 332 332Preference Capital - - - - - -

Reserves & Surplus 1,708 2,100 2,524 2,923 3,265 3,633

Shareholders Funds 2,040 2,433 2,857 3,256 3,598 3,966Minority Interest 78 90 112 109 109 109

Total Loans 2,915 4,624 7,072 8,776 9,776 11,776

Deferred Tax Liability 27 23 26 26 26 26

Total Liabilities 5,060 7,170 10,067 12,167 13,509 15,877APPLICATION OF FUNDSGross Block 4,019 4,132 6,619 7,071 9,813 14,527

Less: Acc. Depreciation 551 769 1,065 1,562 2,092 2,732

Net Block 3,467 3,362 5,554 5,509 7,721 11,795Capital Work-in-Progress 880 2,507 2,445 4,916 4,026 2,670

Goodwill - - - - - -

Investments 45 55 14 62 72 82Current Assets 1,148 2,055 2,845 2,721 2,766 2,588Cash 510 1,200 1,821 1,471 1,358 1,064

Loans & Advances 438 600 815 970 1,094 1,191

Other 199 255 209 280 314 333

Current liabilities 482 810 791 1,041 1,076 1,258

Net Current Assets 666 1,245 2,054 1,680 1,690 1,330Mis. Exp. not written off 1 - - - - -

Total Assets 5,060 7,170 10,067 12,167 13,509 15,877

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August 10, 2013 12

Cash flow statement (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EProfit before tax 417 576 651 707 635 669

Depreciation 107 218 295 498 530 639Change in Working Capital 141 111 (188) 24 (123) 67

Less: Other income (51) (64) (125) (130) (133) (149)

Direct taxes paid (13) (112) (155) (153) (138) (145)

Cash Flow from Operations 601 729 478 945 771 1,081(Inc.)/ Dec. in Fixed Assets (984) (1,740) (2,425) (2,923) (1,852) (3,358)

(Inc.)/ Dec. in Investments 66 (10) 41 (48) (10) (10)

Other income 51 64 125 130 133 149

Cash Flow from Investing (867) (1,686) (2,259) (2,841) (1,728) (3,219)Issue of Equity - 0 (0) 0 - -

Inc./(Dec.) in loans 429 1,709 2,448 1,704 1,000 2,000

Dividend Paid (Incl. Tax) (76) (60) (72) (156) (156) (156)

Others 9 (3) 25 (2) (0) -

Cash Flow from Financing 362 1,647 2,401 1,546 844 1,844Inc./(Dec.) in Cash 95 690 621 (350) (113) (294)

Opening Cash balances 415 510 1,200 1,821 1,471 1,358Closing Cash balances 510 1,200 1,821 1,471 1,358 1,064

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Key Ratios

Y/E March FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 6.1 5.2 4.7 4.2 4.7 4.5P/CEPS 4.2 3.5 3.0 2.4 2.3 2.0

P/BV 1.2 1.0 0.8 0.7 0.7 0.6

Dividend yield (%) 2.7 2.1 2.5 5.6 5.6 5.6

EV/Sales 2.8 2.4 2.4 2.6 2.8 3.1

EV/EBITDA 6.0 5.3 5.6 5.9 6.3 6.8

EV / Total Assets 0.9 0.8 0.8 0.8 0.8 0.8

Per Share Data (`)EPS (Basic) 11.6 13.6 14.9 16.7 15.0 15.8

EPS (fully diluted) 11.6 13.6 14.9 16.7 15.0 15.8

Cash EPS 17.1 20.4 23.9 30.0 30.9 35.0

DPS 1.9 1.5 1.8 4.0 4.0 4.0

Book Value 61.4 73.2 85.9 98.0 108.2 119.3

Dupont AnalysisEBIT margin 36.2 35.4 34.2 32.3 31.2 30.3

Tax retention ratio 96.8 80.6 76.2 78.3 78.3 78.3

Asset turnover (x) 0.4 0.5 0.4 0.4 0.3 0.3

ROIC (Post-tax) 14.2 13.2 11.5 9.9 8.1 7.5

Cost of Debt (Post Tax) 9.0 7.5 7.1 6.1 5.8 5.6

Leverage (x) 1.2 1.3 1.6 2.0 2.3 2.5

Operating ROE 20.3 20.6 18.6 17.6 13.5 12.3

Returns (%)ROCE (Pre-tax) 13.2 14.1 12.4 10.7 9.2 8.7

Angel ROIC (Pre-tax) 20.3 24.2 23.2 20.6 17.1 12.7

ROE 20.4 20.2 18.8 18.2 14.5 13.9

Turnover ratios (x)Asset Turnover (Gross Block) 0.5 0.6 0.6 0.5 0.5 0.3

Inventory / Sales (days) 40 25 19 20 23 20

Receivables (days) 5 5 3 1 1 1

Payables (days) 62 125 139 124 142 142

WC cycle (ex-cash) (days) 133 112 109 113 127 126

Solvency ratios (x)Net debt to equity 1.2 1.4 1.8 2.2 2.3 2.7

Net debt to EBITDA 3.0 3.1 3.8 4.5 4.9 5.6

Interest Coverage 2.5 2.5 2.0 1.9 1.7 1.7

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

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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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IRB Infra, 1Q FY 14