Earnings Outlook
Lesser construction to lower IRB Infra Jul-Sept net profit
This story was originally published at 19:58 IST on 29 October 2024
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By Akshita Kumar
MUMBAI – Subdued construction activity due to heavy rains and an increase in losses of its associate companies on a sequential basis are likely to have hit the net profit of IRB Infrastructure Developers Ltd. in the September quarter. The company is expected to report a consolidated net profit of INR 929.6 million for the latest quarter, down 2.9% on year, an average of estimates from five brokerages showed.
The company had reported a consolidated net profit of INR 957.5 million for the same period in the last financial year. Sequentially, the net profit is expected to fall 33.6% from INR 1.40 billion in Apr-Jun.
The company is expected to report consolidated revenues of INR 17.36 billion for the September quarter, down 0.5% on year, according to the estimates. The company had reported a consolidated revenue of INR 17.45 billion for the same period a year ago. Sequentially, the consolidated revenue is seen down 6.3% from INR 18.53 billion.
Of the five brokerages, Kotak Institutional Equities has estimated the highest net profit for the company at INR 1.13 billion and Anand Rathi Share and Stock Brokers Ltd. has estimated the lowest at INR 798 million. The estimates for consolidated revenue for the quarter range from INR 16.60 billion by HDFC Securities Ltd. to INR 18.08 billion by Antique Stock Broking Ltd.
The transport infrastructure developer is expected to report on-year growth in construction revenue of almost 3% and on-year decline of 7% in revenue from the build-operate-transfer segment, brokerage Motilal Oswal said in an earnings preview. It expects the company's operating margin at 46.3%, up 80 basis points on year. The brokerage expects the company to be cautious in bidding owing to the aggressive bidding seen in National Highways Authority of India projects. Kotak Institutional Equities expects the company to report revenue growth of 3% on year, driven by a 4% increase in toll revenues and steady construction revenue.
The company's engineering, procurement, and construction estimated order book at the beginning of Jul-Sept stood at INR 47 billion, providing revenue visibility for at least the next two years, Antique Stock Broking said. The company also has another INR 23 billion of operations and maintenance order book executable in the next two years. The brokerage expects toll revenue from wholly-owned concessions to be almost flat. However, the addition of new assets in private infrastructure investment trusts will lead to improved performance, the brokerage said.
Motilal Oswal, Kotak Institutional Equities, and Antique Stock Broking expect new order wins to be the key area of focus for the company. Kotak Institutional Equities expects the company's overall earnings before interest, tax, depreciation, and amortisation margin will be 45.5%, with an EBITDA margin of 22% in the construction segment and 88% in the build-operate-transfer segment.
Anand Rathi, with a 'hold' rating on the stock, expects an EBITDA margin of 46.7% for the company. The company's EBITDA is estimated to be INR 8.06 billion, the median of four brokerage estimates showed. The estimates for EBITDA range from INR 8.23 billion by Antique Stock Broking to INR 7.80 billion by HDFC Securities.
The company will declare its Jul-Sept earnings on Oct. 30. Shares of the company ended Tuesday at INR 51.92 on the National Stock Exchange, up 0.3%.
Following are the Jul-Sept earnings estimates of IRB Infrastructure Developers Ltd., in INR million, based on reports from five brokerages:
Brokerage firm | Net Sales |
Net Profit | EBITDA |
Anand Rathi Share and Stock Brokers Ltd. | 16,785.00 | 798.00 | - |
Antique Stock Broking Ltd. | 18,084.00 | 1,059.00 | 8,228.00 |
HDFC Securities Ltd. | 16,600.00 | 800.00 | 7,800.00 |
Kotak Institutional Equities | 17,913.00 | 1,131.00 | 8,150.00 |
Motilal Oswal Financial Services Ltd. | 17,394.00 | 860.00 | 8,049.00 |
Average | 17,355.20 | 929.60 | 8,056.75 |
End
Edited by Rajeev Pai
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