IRB Infra 4Q FY 2013

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

Quarterly highlights - ConsolidatedY/E March (` cr) 4QFY13 4QFY12 3QFY13 % chg (yoy) % chg (qoq)Net sales 948 851 914 11.4 3.8Op. profit 423 384 408 10.1 3.6

Net profit 151 120 143 25.6 5.9Source: Company, Angel Research

For 4QFY2013, IRB Infrastructure (IRB) reported a healthy set of numbers and

was above street expectations. The companys revenue came below our expectation

owing to delay in toll collection at IRDP-Kolhapur BOT project which led to

lower-than-expected BOT revenue for the quarter. However better-than-expected

performance at the EBITDAM level and lower tax expense led to healthy growth at

earnings level. In accordance with its strategy to declare ~20% of post-tax

consolidated profit towards dividend, IRB declared an interim dividend of`1/share.

Strong performance continues:IRBs top line witnessed a growth of 11.4% yoy to`948cr in 4QFY2013 and was below our estimate of `1,104cr. The growth was

mainly due to healthy execution pace in the under-construction BOT projects. The

E&C segments revenue grew by 10.6% yoy to`691cr (our estimate was`638cr)

while the BOT segment witnessed 12.7% yoy growth to `289cr (our estimate was

`310cr). On the EBITDAM front, IRBs margin came in at 44.6% in 4QFY2013,

indicating a decline of 53bp on a yoy basis and was higher than our estimate of

44.0%. Stable input prices and strong execution led to EBITDAM of 30.7%

(excluding other income) for E&C segment. Interest cost came in at `158cr,indicating a growth of 3.0% on a yoy basis. At the earnings front, IRB reported

PAT of `151cr (our estimate was `187cr), an increase of 25.6% yoy owing to

better-than-expected operating performance and lower tax expense.

Outlook and valuation: IRB has a robust order book of `6,431cr (2.4x FY2013E&C revenue, excluding O&M orders), which lends revenue visibility. IRB is

currently pre-qualified to submit bids for projects worth `28,000cr and is

targeting order inflow of `3,000cr-4,000cr over FY2014. The stock trades at

FY2014E and FY2015E P/B of 1.1x and 1.0x respectively. We maintain our Buyview on the stock with a target price of `157.Key financials (Consolidated)Y/E March (` cr) FY2012 FY2013A FY2014E FY2015ENet Sales 3,133 3,687 3,997 4,312% chg 28.5 17.7 8.4 7.9

Adj.Net Profit 496 557 522 553% chg 9.6 12.2 (6.2) 5.9

EBITDA (%) 43.7 44.3 45.5 46.4

FDEPS (`) 14.9 16.7 15.7 16.6P/E (x) 8.3 7.4 7.9 7.5

P/BV (x) 1.4 1.3 1.1 1.0

RoE (%) 18.8 18.2 15.2 14.5

RoCE (%) 12.4 10.6 9.2 8.4

EV/Sales (x) 3.0 3.2 3.5 3.7

EV/EBITDA (x) 6.9 7.1 7.6 8.0

OB/sales(x) 3.0 2.4 3.1 3.5

Order inflow (1,058) 2,693 3,384 3,574

%chg na na 25.7 5.6

Source: Company, Angel Research

BUYCMP `124

Target Price `157

Investment Period 12 Months

Stock Info

Sector

Net debt 7,300

Bloomberg Code

Shareholding Pattern (%)

Promoters 62.9MF / Banks / Indian Fls 4.0

FII / NRIs / OCBs 22.6

Indian Public / Others 10.5

Abs. (%) 3m 1yr 3yr

Sensex 2.9 23.3 18.4

IRB 6.7 10.6 (54.0)

Infrastructure

Market Cap (`cr) 4,131

Beta 1.3

52 Week High / Low 161/104

Avg. Daily Volume 403,669

Face Value (`) 10

BSE Sensex 20,213

Nifty 6,147

Reuters Code IRBI.BO

IRB@IN

Viral Shah022-39357800 Ext: 6842

[email protected]

IRB InfrastructurePerformance Highlights

4QFY2013 Result Update | Infrastructure

May 15, 2013

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IRB Infrastructure | 4QFY2013 Result Update

May 15, 2013 2

Exhibit 1:4QFY2013 performance (Consolidated)

Y/E March (` cr) 4QFY13 4QFY12 % chg(yoy) 3QFY13 % chg(qoq) FY2013 FY2012 % chg(yoy)Income from operations 948 851 11.4 914 3.8 3,687 3,134 17.7Total expenditure 525 467 12.5 506 3.9 2,054 1,764 16.5Operating profit 423 384 10.1 408 3.6 1,633 1,370 19.2OPM (%) 44.6 45.1 (53)bp 44.6 (6)bp 44.3 43.7 57bp

Interest 158 153 3.0 159 (1.2) 615 546 12.6

Depreciation 109 102 7.8 113 (3.0) 442 297 48.7

Non operating income 32 33 (4.1) 33 (2.7) 130 125 3.9

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

Profit Before tax 188 163 15.5 168 11.4 707 652 8.4Tax 34 45 27 153 155 (1.4)

PAT 154 117 31.2 141 9.0 554 497 11.4Share of Profits/ (Losses) of Asso. - - - - - - - -

Share of Profits/ (Losses) of MI 3 (3) (195.1) (1) (296.4) (3) 0 -

PAT after MI and Share of Assoc. 151 120 25.6 143 5.9 557 497 12.0PAT (%) 15.9 14.1 179bp 15.6 32bp 15.1 15.9 (76)bp

FDEPS (`) 4.5 3.6 25.6 4.3 5.9 16.7 15.0 12.0Source: Company, Angel Research

Exhibit 2:Segmental revenue break-up (Consolidated)

Particulars 4QFY13 4QFY12 % chg 3QFY13 % chg FY2013 FY2012 % chgConstruction segment 691 625 10.6 666 3.7 2,729 2,277 19.8

BOT segment 289 257 12.7 280 3.2 1,088 981 11.0Total Income 980 881 11.2 947 3.5 3,817 3,258 17.2Construction segment 206 186 10.2 197 4.1 816 629 29.8

BOT segment 245 227 8.1 243 0.9 947 870 8.9

EBITDA 451 414 9.0 441 2.3 1,763 1,499 17.7Construction segment (%) 29.8 29.9 (11)bp 29.6 10bp 29.9 27.6 229bp

BOT segment (%) 84.8 88.5 (367))bp 86.7 (187)bp 87.0 88.7 (165)bp

EBITDAM (%) 46.0 46.9 (93) bp 46.6 (54)bp 46.2 46.0 20bpConstruction segment 56 43 30.3 61 (7.4) 238 136 74.3

BOT segment 97 106 (8.3) 99 (1.1) 377 414 (8.8)

Financial expenses 154 150 2.9 159 (3.5) 615 551 11.8Construction segment 14 15 (9.9) 14 (1.4) 54 57 (5.6)

BOT segment 96 86 10.9 99 (3.2) 387 240 61.7

Depreciation & Amortisation 109 102 7.8 113 (3.0) 442 297 48.7Construction segment 135 128 5.8 123 10.4 524 435 20.5

BOT segment 52 35 51.1 46 14.3 182 216 (15.6)

PBT 188 163 15.5 168 11.4 707 651 8.5Construction segment 88 87 0.5 83 6.3 352 299 17.8

BOT segment 66 30 120.5 59 12.8 202 197 2.2

PAT after minority interest 154 117 31.2 141 9.0 554 496 11.6Source: Company, Angel Research

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Exhibit 3:4QFY2013 Actual vs Angel estimates

Parameter (` cr) Estimates Actual Variation (%)Revenue 1,104 948 (14.1)

EBITDA 486 423 (13.0)Interest 159 158 (0.9)

PBT 248 188 (24.3)

Tax 62 34 (45.7)

PAT 187 151 (19.3)


Sturdy execution continues

IRBs top line witnessed a growth of 11.4% yoy to `948cr in 4QFY2013 and was

below our estimate of`1,104cr. The growth was mainly due to healthy execution

pace in the under-construction BOT projects (Jaipur-Deoli ~`76cr, Talegaon-Amravati ~`26cr, Pathankot-Amritsar ~`165cr, Tumkur-Chitradurga ~`163cr

and Ahmedabad-Vadodara`240cr). The E&C segments revenue (including other

income) grew by 10.6% yoy to `691cr (our estimate was `640cr) while the BOT

segment (including other income) witnessed 12.7% yoy growth to `289cr (our

estimate was`310cr).

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

Jaipur-Deoli 95%; Talegaon-Amravati 95%; Pathankot-Amritsar 80%;

and Tumkur-Chitradurga 75%. IRB has achieved provisional certificate for

Talegaon-Amravati and has started partial toll collection in 1QY2014. The

construction activity on Pathankot-Amritsar and Tumkur-Chitradurga BOT projectsis moving as per schedule and management expects to complete the projects by

June 2013 and December 2013 respectively.

Under-construction/development projects update

Kolhapur project: As per management state government has issued provisionalcertificate for IRDP-Kolhapur BOT project and expects to commence toll collection

by May end.

MVR infra: MVR Infrastructure and Tollways Pvt Ltd has become a subsidiary of thecompany from October 1, 2012. The gross toll collection revenue for the full yearstood at`29cr.

Ahmedabad-Vadodara: During the quarter, the company has started toll collectionon the existing four lane expressway from January 1, 2013. The gross toll

collection for 4QFY2013 stood at`29cr.

Goa-Kundapur: IRB is waiting for LOA from NHAI for this recently bagged project;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

concessionaire period of 95 years which includes 18 months of construction

period.

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May 15, 2013 4

Exhibit 4:Strong performance continues


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


BOT toll revenue

On the toll collection front, Bharuch-Surat BOT project witnessed a healthy traffic

growth of 10% yoy while Surat-Dahisar and Mumbai-Pune BOTprojects witnessed

2% and 3% yoy growth in traffic for 4QFY2013. Owing to ban in mining activity

and adjusted for the hike in toll rates, Tumkur-Chitradurga saw a decline in traffic

growth of 2% yoy for the quarter. Overall, on the toll collection front, IRB reported

a growth of 22.1% yoy to `395cr in 4QFY2013 with an average toll collection of

`4.4cr/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 4QFY13 4QFY12 % chg(yoy) 3QFY13 % chg(qoq) FY2013 FY2012 % chg(yoy)Surat Dahisar BOT Project^ 120 107 12.3 116 3.5 444 401 10.8

Mumbai Pune BOT Project 104 99 4.3 105 (1.3) 416 398 4.7

Thane Bhiwandi Bypass 4 Lane BOT Project 18 17 9.0 17 5.2 69 63 9.4

Thane Ghodbunder BOT Project 8 8 2.6 8 1.3 31 29 6.5

Pune Nashik BOT Project 6 6 1.7 6 (1.7) 24 23 4.0

Pune Sholapur BOT Project 5 4 4.5 4 7.0 18 17 5.4

Nagar Karmala Tembhurni BOT Project 4 4 2.9 4 (5.3) 15 14 4.2

Mohol Mandrup Kamtee BOT Project 2 2 (19.0) 2 (5.6) 8 8 -5.1Kharpada Bridge BOT Project 2 2 0.0 2 4.8 9 8 2.4

Bharuch Surat BOT Project $ 44 37 18.4 39 13.6 161 143 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 38 4.5 39 0.0 160 126 0.0

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

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

Total 395 323 22.1 357 10.7 1411 1229 14.8Source: 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 equitystake in the Project, #^ Toll Collection at Ahmeadba- Vadodara Expressway has been started from January 1, 2013

736

746

851

980

845

914

948

50.1

11.5 10.9

22.3

14.9

22.5

11.4

-

10.0

20.0

30.0

40.0

50.0

60.0

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

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

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

528

526

625

750

622

666

691

238

253

257

262

257

280

289

0

100

200

300

400

500

600

700

800


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

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May 15, 2013 5

Impressive show on the EBITDA and earnings front

On the EBITDAM front, IRBs margin came in at 44.6% in 4QFY2013, indicating a

decline of 53bp on a yoy basis and was higher than our estimate of 44.0%. Owing

to strong execution of its under-construction BOT projects and stable input prices,

EBITDAM for E&C segment came in at 30.7% (excluding other income). The

Management expects to maintain these margins going ahead as well, given that

input prices are unlikely to change significantly. On the BOT front, EBIDTAM

(including other income) decline by 367bp/187 on a yoy/qoq basis to 84.8% in

4QFY2013.

Depreciation came in at`109cr an increased by 7.8% yoy and was in-line with our

estimate. Interest cost grew by 3.0% yoy to `158cr in 4QFY2013. At the earnings

front, IRB reported PAT of`151cr (our estimate was`187cr), an increase of 25.6%

yoy owing to better-than-expected operating performance and lower tax expense

during the quarter.

Exhibit 7:EBITDA margin steady


Exhibit 8:Healthy performance on the earnings front


321

342

384

425

381

408

423

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

-

50

100

150

200

250

300

350

400

450


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

11

0

13

1

12

0

14

2

12

1

14

3

15

1

15.0

17.6

14.1

14.5 14.315.6 15.9

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

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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May 15, 2013 6

Outlook and valuation

Based on the current order book mix we have revised our estimates downwards for

FY2014 and introduce our FY2015 estimate respectively.

Exhibit 9:Change in estimates

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

Revenues (`cr) 4,152 3,997 (3.7) 4,332 4,332 -

EBITDA Margins (%) 44.4 45.5 2.5 46.4 46.4 -

PAT (`cr) 564 522 (7.4) 539 539 -


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

towards dividend, IRB declared an interim dividend of`1/share during the quarter.

IRB has a robust order book of `6,431cr (2.4x FY2013E 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 FY2013; IRB expects

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

bids for projects worth `28,000cr and is targeting order inflow of `3,000cr-

4,000cr over FY2014.

We have used sum-of-the-parts (SOTP) method to value the stock. We value theconstruction business at a P/E of 5x FY2015E earnings and IRBs BOT projects ona 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 `157, indicating anupside of 27%.

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May 15, 2013 7

Exhibit 10:SOTP break-up

Particulars Segment Driver Multiple Value (` cr) Value pershare (`) Proportionate stake(%) BasisIRB's construction business Construction 299 5 1,493 45 28.6

P/E of 5x one year

rolling forward earningsTotal 1,493 45 28.6Road BOT projects

Thane Bhiwandi Bypass Toll 330 10 6.3 NPV at CoE of 14%

Kharpada Bridge Toll 29 1 0.6 NPV at CoE of 14%

Nagar - Karnala - Tembhurni Toll 59 2 1.1 NPV at CoE of 14%

Mohol - Mandrup - Kamtee Toll 46 1 0.9 NPV at CoE of 14%

Pune - Solapur Toll 103 3 2.0 NPV at CoE of 14%

Pune - Nashik Toll 152 5 2.9 NPV at CoE of 14%

Mumbai - Pune Toll 1,601 48 30.6 NPV at CoE of 14%

Thane Ghodbunder Toll 126 4 2.4 NPV at CoE of 14%

Surat Dahisar Toll 226 7 4.3 NPV at CoE of 14%Bharuch - Surat Toll 217 7 4.1 NPV at CoE of 14%

IRDP, Kolhapur Toll 251 8 4.8 NPV at CoE of 14%

Pathankot - Amritsar Toll 453 14 8.7 NPV at CoE of 14%

Talegaon - Amravati Toll 219 7 4.2 NPV at CoE of 14%

Jaipur- Deoli Toll 480 14 9.2 NPV at CoE of 14%

Tumkur - Chitradurga Toll 286 9 5.5 NPV at CoE of 14%

Ahmedabad- Vadodara Toll (300) (9) (5.7) NPV at CoE of 14%

Omallur Salem -Namakkal Toll 65 2 1.2 NPV at CoE of 14%

Goa/Karnataka Border to Kundapur Toll 164 5 3.1 NPV at CoE of 14%

Total 4,340 136 86.2Real Estate Real Estate 1,500 0 0 0 0.0 No value ascribed giventhe pending court case

Net debt (770) (23) (14.7) Standalone net debt

Grand Total 5,063 157 100.0Source: 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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May 15, 2013 8

Exhibit 12:Angel EPS forecast vs consensus

Angel forecast Bloomberg consensus Variation (%)FY2014E 15.7 15.9 (1.2)

FY2015E 16.6 17.4 (4.4)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 `6,431cr, excludingO&M orders (2.4x FY2013 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 pressures 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 and leads to time and cost control for projects in hand/under development.

The company also has one airport project, which is at a very nascent stage; decent

land bank; and one small wind mill project.

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May 15, 2013 9

Exhibit 13:Recommendation summary

Company CMP TP Rating Top-line (` cr) EPS (`) P/E OB/FY12 FY13E FY14E CAGR (%) FY12 FY13E FY14E CAGR (%) FY12 FY13E FY14E Sales(x)

ABL 221 255 Buy 1,853 1,928 2,234 9.8 16.0 18.0 22.2 17.7 13.8 12.3 10.0 2.3CCCL 12 - Neutral 1,931 2,281 2,492 13.6 (3.3) 0.7 2.0 - (3.7) 17.7 6.0 2.2

IRB Infra 124 157 Buy 3,687 3,997 4,312 8.1 16.7 15.7 16.6 (0.3) 7.4 7.9 7.5 2.4ITNL 178 230 Buy 6,645 7,444 8,041 10.0 26.8 29.8 32.1 9.4 6.6 6.0 5.5 2.2

IVRCL 20 35 Buy 3,773 6,287 6,836 34.6 (3.9) 2.3 3.0 - - 8.7 6.7 4.9

JP Assoc. 76 90 Buy 13,358 14,850 15,631 8.2 2.2 2.5 2.9 13.8 34.3 29.9 26.5 -

L&T 1,580 1,795 Accu. 60,837 69,586 79,247 14.1 63.4 75.1 84.8 15.7 24.9 21.0 18.6 2.7

NCC 36 45 Buy 5,863 6,576 7,264 11.3 3.1 4.1 4.8 24.6 11.8 8.9 7.6 3.3

Punj Lloyd 54 - Neutral 11,717 12,954 14,740 12.2 (0.2) 0.5 0.9 - - 107.3 58.4 1.9

Sadbhav 114 153 Buy 1,565 2,511 2,736 32.2 1.5 7.3 7.8 131.3 78.0 15.6 14.6 3.3

Simplex In. 113 164 Buy 6,026 6,824 7,563 12.0 14.1 18.0 23.4 28.8 8.0 6.3 4.8 2.5

Unity Infra 32 45 Buy 2,180 2,455 2,734 12.0 12.7 14.6 14.9 8.0 2.5 2.2 2.1 2.0


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 87 34 - - 168 66 - - - - 255

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

IRB Infra 45 29 - - 112 71 - - - - 157ITNL 80 35 - - 120 52 - - 30 13 230IVRCL 15 43 - - - - 20 57 - - 35

JP Assoc. 24 27 23 25 - - - - 43 48 90

L&T 1,358 76 - - - - 437 24 - - 1,795

NCC 25 57 - - 7 16 - - 12 27 44

Punj Lloyd 64 100 - - - - - - - - 64

Sadbhav 54 35 - - 99 65 - - - - 153

Simplex In. 164 100 - - - - - - - - 164

Unity Infra 45 100 - - - - - - - - 45


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May 15, 2013 10

Profit & loss statement (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013A FY2014E FY2015ENet Sales 1,705 2,438 3,133 3,687 3,997 4,312Other operating income - - - - - -Total operating income 1,705 2,438 3,133 3,687 3,997 4,312% chg 71.9 43.0 28.5 17.7 8.4 7.9

Total Expenditure 906 1,350 1,764 2,054 2,178 2,311R.M. consumed 450 413 639 682 731 780

Construction expenses 335 769 886 1,125 1,159 1,224

Employee expenses 71 93 138 156 164 177

SG&A 50 76 101 122 124 129

EBITDA 799 1,088 1,369 1,633 1,819 2,001% chg 82.1 36.2 25.8 19.3 11.4 10.0

(% of Net Sales) 46.9 44.6 43.7 44.3 45.5 46.4

Depreciation & Amortisation 182 225 297 442 592 690

EBIT 617 863 1,072 1,192 1,226 1,311% chg 90.2 39.8 24.3 11.1 2.9 6.9

(% of Net Sales) 36.2 35.4 34.2 32.3 30.7 30.4

Interest & other Charges 251 352 546 615 704 760

Other Income 51 64 125 130 140 151

(% of PBT) 12.2 11.2 19.2 18.4 21.1 21.5

Share in profit of Associates - - - - - -

Recurring PBT 417 576 651 707 662 702% chg 93.8 38.2 13.1 8.5 (6.2) 5.9

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

PBT (reported) 417 576 651 707 662 702Tax 13.3 111.7 155.2 153.0 143.5 151.9

(% of PBT) 3.2 19.4 23.8 21.7 21.7 21.7

PAT (reported) 403 464 496 554 519 550Add: Share of earnings of asso. - - - - - -

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

Prior period items - - - - - -

PAT after MI (reported) 385 452 496 557 522 553ADJ. PAT 385 452 496 557 522 553% chg 119.2 17.4 9.6 12.2 (6.2) 5.9(% of Net Sales) 22.6 18.6 15.8 15.1 13.1 12.8

Basic EPS (`) 11.6 13.6 14.9 16.7 15.7 16.6Fully Diluted EPS (`) 11.6 13.6 14.9 16.7 15.7 16.6% chg 119.2 17.4 9.6 12.2 (6.2) 5.9

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Balance sheet (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013A FY2014E FY2015ESOURCES OF FUNDSEquity Share Capital 332 332 332 332 332 332Preference Capital - - - - - -

Reserves & Surplus 1,708 2,100 2,524 2,923 3,285 3,678

Shareholders Funds 2,040 2,433 2,857 3,256 3,618 4,011Minority Interest 78 90 112 109 106 103Total Loans 2,915 4,624 7,072 8,963 10,663 12,663

Deferred Tax Liability 27 23 26 26 26 26

Total Liabilities 5,060 7,170 10,067 12,354 14,413 16,803APPLICATION OF FUNDSGross Block 4,019 4,132 6,620 8,227 10,969 15,682

Less: Acc. Depreciation 551 769 1,065 1,506 2,099 2,789

Net Block 3,467 3,362 5,554 6,720 8,870 12,894Capital Work-in-Progress 880 2,507 2,445 3,587 4,026 2,670

Goodwill - - - 117 117 117

Investments 45 55 14 62 72 82Current Assets 1,148 2,055 2,845 2,721 2,432 2,594Cash 510 1,200 1,821 1,471 951 889

Loans & Advances 438 600 778 970 1,153 1,344

Other 199 255 246 280 328 361

Current liabilities 482 810 791 853 1,103 1,554

Net Current Assets 666 1,245 2,054 1,867 1,328 1,040Mis. Exp. not written off 1 - - - - -

Total Assets 5,060 7,170 10,067 12,354 14,413 16,803

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Cash flow statement (Consolidated)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013A FY2014E FY2015EProfit before tax 417 576 651 707 662 702

Depreciation 107 218 295 442 592 690Change in Working Capital 141 111 (188) (163) 19 226

Less: Other income (51) (64) (125) (130) (140) (151)

Direct taxes paid (13) (112) (155) (153) (143) (152)

Cash Flow from Operations 601 729 478 702 990 1,315(Inc.)/ Dec. in Fixed Assets (984) (1,740) (2,425) (2,750) (3,180) (3,358)

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

Other income 51 64 125 130 140 151

Cash Flow from Investing (867) (1,686) (2,259) (2,668) (3,050) (3,217)Issue of Equity - 0 (0) - - -

Inc./(Dec.) in loans 429 1,709 2,448 1,891 1,700 2,000

Dividend Paid (Incl. Tax) (76) (60) (72) (160) (160) (160)

Others 9 (3) 25 (115) - -

Cash Flow from Financing 362 1,647 2,401 1,616 1,540 1,840Inc./(Dec.) in Cash 95 690 621 (350) (520) (62)

Opening Cash balances 415 510 1,200 1,821 1,471 951Closing Cash balances 510 1,200 1,821 1,471 951 889

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Key Ratios

Y/E March FY2010 FY2011 FY2012 FY2013A FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 10.7 9.1 8.3 7.4 7.9 7.5P/CEPS 7.3 6.1 5.2 4.1 3.7 3.3

P/BV 2.0 1.7 1.4 1.3 1.1 1.0

Dividend yield (%) 1.6 1.2 1.4 3.2 3.2 3.2

EV/Sales 3.8 3.1 3.0 3.2 3.5 3.7

EV/EBITDA 8.2 6.9 6.9 7.1 7.6 8.0

EV / Total Assets 1.3 1.1 0.9 0.9 1.0 0.9

Per Share Data (`)EPS (Basic) 11.6 13.6 14.9 16.7 15.7 16.6

EPS (fully diluted) 11.6 13.6 14.9 16.7 15.7 16.6

Cash EPS 17.1 20.4 23.9 30.0 33.5 37.4

DPS 1.9 1.5 1.8 4.0 4.0 4.0

Book Value 61.4 73.2 85.9 98.0 108.9 120.7

Dupont AnalysisEBIT margin 36.2 35.4 34.2 32.3 30.7 30.4

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 9.8 7.9 7.0

Cost of Debt (Post Tax) 9.0 7.5 7.1 6.0 5.6 5.1

Leverage (x) 1.2 1.3 1.6 2.1 2.5 2.8

Operating ROE 20.3 20.6 18.6 17.5 13.6 12.3

Returns (%)ROCE (Pre-tax) 13.2 14.1 12.4 10.6 9.2 8.4

Angel ROIC (Pre-tax) 20.3 24.2 23.2 18.4 14.9 11.7

ROE 20.4 20.2 18.8 18.2 15.2 14.5

Turnover ratios (x)Asset Turnover (Gross Block) 0.5 0.6 0.6 0.5 0.4 0.3

Inventory / Sales (days) 40 25 19 20 22 20

Receivables (days) 5 5 3 1 1 2

Payables (days) 62 125 168 130 128 156

WC cycle (ex-cash) (days) 133 112 109 113 125 135

Solvency ratios (x)Net debt to equity 1.2 1.4 1.8 2.3 2.7 2.9

Net debt to EBITDA 3.0 3.1 3.8 4.6 5.3 5.9

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 4Q FY 2013