Neutral on IRB Infra, target price Rs 120: Motilal Oswal

Motilal Oswal has given a neutral rating to IRB Infrastructure Developers with a target price of Rs 120. The share price moved up by 2.37 per cent from its previous close of Rs 124.65. The stock’s last traded price is Rs 127.60.

IRB Infrastructure Developers Ltd., incorporated in the year 1998, is a Mid Cap company (having a market cap of Rs 4475.72 Crore) operating in Infrastructure sector.

For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 1022.30 Crore, down 35.48 % from last quarter Sales of Rs 1584.45 Crore and down 42.34 % from last year same quarter Sales of Rs 1773.04 Crore. The Company reported net profit after tax of Rs 45.72 Crore in latest quarter.


Investment Rationale
The brokerage has incorporated the Mumbai-Pune Phase-II wins in the estimates, leading to FY21/FY22E consol. earnings upgrade of 29%/26%. However, weak order inflows may pose downside risk to earnings estimates. It maintains Neutral with SOTP-based TP of Rs 120 on the stock. Any favorable outcome on the Ahmedabad-Vadodara project could pose significant upside to the TP as the brokerage currently attributes negative valuation (-INR56/share) to the project.

Promoter/FII Holdings
Promoters held 57.7 per cent stake in the company as of June 30, 2020, while FIIs held 14.6 per cent, DIIs 10.9 per cent and public and others 16.7 per cent.