IRB Infrastructure Developers on Wednesday reported a 65% year-on-year jump in its net profit for the second quarter to `235 crore, beating analysts' expectations for a 22% increase in the profit.
IRB Infrastructure Developers on Wednesday reported a 65% year-on-year jump in its net profit for the second quarter to Rs 235 crore, beating analysts’ expectations for a 22% increase in the profit. The top line for the quarter was marginally lower, down 4% y-o-y to Rs 1,269 crore, in line with expectations, as the company transferred seven road assets to IRB InvIT, limiting revenue growth at the parent company. Other incomes grew four-fold to Rs 146 crore. Earnings before interest, tax, depreciation and amortization (EBITDA) dropped 19% to Rs 572.44 crore while EBITDA margins contracted 395 basis points to 50.98%. The impact on margins was due to the loss of revenue from projects that were transferred to the InvIT. Revenues from operations dropped 13% y-o-y to Rs 1,122 crore.
However, Virendra Mhaiskar, CMD, explained that the company preserved its margins in each of its two business segments. He told FF, “While the overall margins contracted, segment-wise, in both the build, operate, transfer (BOT) and the construction businesses, the margins have improved slightly over the last year.”
Mhaiskar also said the traffic growth has picked up after the implementation of the GST. He said, “Since September, we have been witnessing promising traffic growth across projects. We have entered the second half with a lot more gusto and look forward to big opportunities unfolding with the latest initiatives of the government.”
Mhaiskar said the company is also looking to bid for projects for which the National Highways Authority of India (NHAI) has invited participants under the new toll-operate-transfer model.
Mhaiskar said, “We may jointly bid or we may bid alone, but we are in talks with potential partners for tie-ups, since the ToT model is a huge opportunity.” He added that the company is now planning to also bid for NHAI projects under the hybrid annuity model. The company said its debt-equity ratio reduced to 1.7:1 from 2.1:1 post listing of its InvIT through which it mopped up around Rs 4,500 crore, and it is now in a net cash position, leading to a rating upgrade for the company a couple of notches — from ‘A-’ to ‘A+’ about a month earlier. At the end of the quarter, the company’s total order book stood at approximately Rs 8,200 crore, including `7,500 crore worth of orders for engineering, procurement and construction (EPC) contracts.
The company said it has achieved financial closure for its Udaipur-Gujarat border project, awarded by the NHAI and for which it has also started tolling from September 4. IRB said it has started commercial operations at its Kaithal-Rajasthan border project from September 8.