NEWSMAKER. IRB's order book gets a massive boost

Seetharaman RBL Research Bureau Updated - January 19, 2018 at 01:58 PM.

Road developer IRB Infrastructure Developers’ stock price moved up 5.2 per cent on Monday after the company got an order for construction, operation and maintenance of Zozilla Tunnel in Jammu & Kashmir from the Ministry of Road Transport & Highways.

The 14.08 km tunnel construction, the longest in South-East Asia and the biggest national highway project awarded in terms of project cost at Rs 10,050 crore, will provide all-weather connectivity between Jammu & Kashmir and Leh-Ladakh.

The present highway NH-1 remains cut-off during winter due to heavy snowfall in an around Zozilla pass.

Clear visibility

This order pipeline of Rs 10,050 crore increases the total construction order pipeline of the company to approximately Rs 16,430 crore.

The project is a Build-Own-Transfer (Annuity) model with a total concession period of 22 years, including 7 years construction. The company will receive a semi-annual annuity of Rs 981 crore from the government after the completion of construction.

Revenue from operations for the company for the year ended March 2015 was Rs 3,847.5 crore. The annual revenue flow once the construction gets over at the end of seven years is Rs 1,962 crore from this project alone which is nearly 51 per cent of the total revenue from the current operational projects for the company.

IRB Infra has a low debt to equity ratio of 2.5 as on March 2015 when compared to its peers. This project also helps the company to expand its base into the new state of Jammu & Kashmir.

The company’s net sales for the quarter ended September increased to Rs 629.75 crore from Rs 436.45 crore in the September 2014 quarter. Profit after tax for the September 2015 quarter, however, was lower at Rs 28.04 crore compared with Rs 80.24 crore for the quarter ended September 2014. The stock trades at a price to earning multiple of 15.06.

Published on January 4, 2016 10:42