IRB Infrastructure Developers

IRB Infrastructure Developers has registered a consolidated revenue growth of 11% (to Rs 745.48 crore) for the quarter ended December 2011 and the operating profit expanded by 16% to Rs 341.69 crore with the operating profit margin expand by 190 bps to 45.8%. However the net profit (after minority interest) was lower by 1% to Rs 131.39 crore hit largely by higher interest rate and depreciation.

• Upside in top-line has come largely from construction services business of the company with income from construction services business was up by 13% (to 525.78 crore or 67% of total income including other income) and that of BOT was up by 18% (to Rs 253.46 crore or 33% of total income). Double digit growth in BOT revenue was largely on account of toll tariff hike as well as higher traffic on year on year basis as well as contribution from Tumkur Citradurga road project which was not there in the corresponding previous period.

• Operating margin for the quarter expanded by 190 bps on year on year basis. This is largely on account of change in revenue mix as well as order mix. The contribution of high margin BOT to topline has increased to 33% compared to 31% in the corresponding previous period. Moreover the margin of both BOT as well as construction services has expanded marginally.

• The EBITDA margin of construction business expanded by 300 bps (to 27.9%) with more projects under execution getting matured and crossing revenue recognition milestone as well as increase in share of high margin projects in total project mix. With sharp expansion in margin together with higher sales saw the EBITDA of construction business grew by 27% to Rs 146.91 crore. On the other hand the EBITDA margin of BOT business too expanded by 80 bps to 90.2% and this together with higher revenue has facilitated 21% growth in EBITDA of BOT to Rs 228.53 crore.

• Interest cost was higher by 73% to Rs 141.96 crore, the depreciation was higher by 24% to Rs 72.37 crore. This has more than negated the benefit of higher other income which jumped by 188% to Rs 33.76 crore there by result in 2% degrowth in PBT to Rs 161.11 crore.

• The taxation was higher by 1% to Rs 29.07 crore. Thus the PAT (before MI and EO (net of tax)) was lower by 3% to Rs 132.04 crore. After accounting for minority interest (down 78% to Rs 0.64 crore) the net profit was up by 1% to Rs 131.39 crore.

Nine month Performance

Consolidated sales were higher by 37% to Rs 2282.69 crore. And with OPM contract by 310 bps to 43.5% the growth at operating profit was restricted to 27% to Rs 992.62 crore. The PBT was up by 12% to Rs 488.67 crore. The taxation was up by 41% to Rs 110.01 crore and thus the PAT before MI was up by 6% to Rs 378.65 crore. The MI was down by 67% to Rs 3.01 crore and the net profit (After MI) was up by 7% to Rs 375.64 crore.

Other developments

The company has an order book of Rs 9128.3 crore compared to 9635.1 crore as end of Sep 2011. The order book comprise of Rs 3392.3 crore of EPC and ongoing BOT projects, BOT projects in O&M phase amounting Rs 2058 crore and BOT project under award / LOA received but construction yet to commence amounting Rs 3678 crore.

During the quarter, National Highways Authority of India (NHAI) have issued a letter to the Project Spy for tenninating the Concession Agreement with respect to Four Laning of GoaiKarnataka Border Panaji Goa Stretch of NH 4A in the State of Goa due to inability of NHAI to resolve the matters on land acquisition, clearance of Forest & Environment Department and disputes on toll rates with the Government of Goa. The Project Spy is in process to claim for the compensation from towards cancellation of Concession Agreement.

During the quarter, wholly owned subsidiary, Modern Road Makers Private Limited has acquired entire share holding of J J Patel Infrastructural and Engineering Private Limited (JJP) for a total consideration of Rs. 900 lacs. Consequently, JJP has become a step down subsidiary of the Company with effect from November 28, 2011. JJP holds mining lease of 100 acres land near Ahmedabad Vadodara Project of the Company which will facilitate the timely supply of stone aggregates required for the purpose of Ahmedabad Vadodara Project. The operations of JJP during the quarter are not material to the Group.

Management Comment

Virendra D. Mhaiskar, Chairman & Managing Director of IRB commenting on results quoted,We are on track to deliver growth as per guidance provided by us at the beginning of the year.

The company has given a guidance of 15-20% growth in topline and bottomline for FY12 at the the start of current fiscal.

The share hovers around Rs 168.15.

IRB Infrastructure Developers : Consolidated Financials