Sadbhav’s BOT projects reflect another quarter of very strong and broad-based traffic growth, leading to double-digit traffic growth for FY2015.
Another year of strong traffic growth with modest tariff increase would lead to aggregate cash profits for its BOT projects from FY2016 (cash loss likely at 12-14% of FY15 revenues; includes negative one-offs). We marginally revise our near-term traffic growth assumptions, leading to a revised TP of R370 (from R365).
Most of SEL’s BOT projects have seen strong yoy traffic growth in 4QFY15. The traffic growth has been very high for mature projects (16-20%) and strong for projects commissioned about two years ago (9-11%). Service revenues for Maharashtra border checkpost have also grown 10% on a sequential basis (not comparable yoy). Weakness in traffic was reflected in a few projects (Dhule-Palasner, Rohtak-Panipat) where traffic growth was negligible/in low single digit. For the full-year FY15, SEL’s BOT projects’ toll revenues were up 46% y-o-y. Accounting for projects that were operational for the past two years (for yoy growth comparison), the growth in revenues was again strong at about 17%. This reflects a double-digit traffic growth for FY15. We estimate an 8-9% traffic growth over the next two years and then 6% traffic growth for the remaining construction period.