IRB

1QFY2011 Result Update | Infrastructure
July 28, 2010

IRB Infrastructure ACCUMULATE
CMP Rs263
Performance Highlights Target Price Rs275

Y/E March (Rs cr) 1QFY11 1QFY10 % chg (yoy) 4QFY10 % chg (qoq) Investment Period 12 Months
Net sales 512.0 414.1 23.6 501.7 2.0
Operating profit 229.3# 166.2 38.0 231.0 (0.8) Stock Info
Net profit 117.5 81.5 44.2 141.7 (17.1) Sector Infrastructure
Source: Company, Angel Research; Note: #
Dividend of Rs20cr from SPV is deducted from Market Cap (Rs cr) 8,735
operating profit and has been put under extra-ordinary income Beta 1.1
IRB Infrastructure (IRB) reported consolidated top-line growth below our estimates, 52 Week High / Low 300/172
primarily led by below-expectation performance by the construction vertical. The
operating margin at the consolidated level outperformed our estimates, primarily Avg. Daily Volume 411639
because of (all time) high construction vertical margins leading to higher-than- Face Value (Rs) 10
expected bottom line. Against this backdrop, we prune our estimates. However, given BSE Sensex 17,957
the robust outlook for the road segment (IRB’s forte) and decent portfolio of BOT
assets, we maintain our Accumulate rating on the stock. Nifty 5,398

Top line below estimates, higher OPM boost bottom line: IRB reported modest top-line Reuters Code IRBI.BO
growth of 23.6% to Rs512cr, well below our expectations of Rs714cr. This was Bloomberg Code IRB@IN
primarily due to modest growth of 20.1% in the construction vertical, against over 50%
growth in the last four quarters. Management is awaiting commencement nod from
NHAI on its four road BOT projects, which dampened the construction segment’s top
line. The consolidated OPM stood at 44.8% (40.1%) against our expectation of 39.7%, Shareholding Pattern (%)
aided by an all-time high construction vertical margin of 28.8%. Depreciation costs Promoters 73.9
were in line with estimates, whereas interest costs came in below our expectation. The
MF / Banks / Indian Fls 7.6
company’s bottom line registered 44.2% growth to Rs117.5cr (Rs81.5cr) against our
expectation of Rs94.1cr. FII / NRIs / OCBs 15.4

Outlook and valuation: NHAI has targeted to award orders worth Rs1lakh cr over the Indian Public / Others 3.1
next one year, in line with the long-term target of achieving 20km a day. We believe if
NHAI is able to achieve even 50% of its targets, then it would imply abundant
opportunities for road developers (read IRB). The recent structural changes have also
Abs. (%) 3m 1yr 3yr#
lessened the vagaries in road development. Hence, we are optimistic on the road
segment. We have valued IRB's business model on an SOTP basis at Rs275, where Sensex 3.3 17.1 1.7
road BOT SPVs have been valued on an NPV basis (FY2012E) and have accorded a IRB (6.2) 36.5 39.1
10% growth premium (Rs154/share) and the construction segment has been valued at #Note: Since Listing on February 25,2008
8x FY2012E EV/EBITDA (Rs113/share). IRB's other investments have been valued at 1x
FY2010 book value (Rs8/share). We maintain Accumulate on the stock with a Target
Price of Rs275.

Key financials (Consolidated)
Y/E March (Rs cr) FY2009 FY2010E FY2011E FY2012E
Net sales 992 1,705 2,778 3,580
% chg 35.4 71.9 62.9 28.9
Adj. net profit 175.8 385.3 410.2 482.2
% chg 54.4 119.1 6.4 17.6
EBITDA (%) 44.1 46.9 42.2 40.5
FDEPS (Rs) 5.3 11.6 12.3 14.5
P/E (x) 49.7 22.7 21.3 18.1 Shailesh Kanani
P/BV (x) 5.0 4.2 3.6 3.1 022-40403800 Ext:321
RoE (%) 10.5 20.3 18.3 18.5 shailesh.kanani@angeltrade.com

RoCE (%) 8.1 13.2 15.8 13.6
Aniruddha Mate
EV/Sales (x) 10.9 6.5 4.6 3.9
022-40403800 Ext:335
EV/EBITDA (x) 24.7 14.0 10.8 9.7 aniruddha.mate@angeltrade.com
Source: Company, Angel Research

Please refer to important disclosures at the end of this report 1

IRB Infrastructure |1QFY2011 Result Update

Exhibit 1: 1QFY2011 performance (Consolidated)
% chg % chg % chg
Y/E March (Rs cr) 1QFY11 1QFY10 4QFY10 FY2010 FY2009
(yoy) (qoq) (yoy)
Income from operations 512.0 414.1 23.6 501.7 2.0 1,705 991.9 71.9
Total expenditure 262.7 248.0 6.0 270.7 (2.9) 905.8 553.1 63.8
#
Operating profit 229.3 166.2 38.0 231.0 (0.8) 799.1 438.8 82.1
OPM (%) 44.8 40.1 470bp 46.0 (120)bp 46.9 44.2 270bp
Interest 66.1 46.7 41.5 81.5 (18.8) 249.4 137.7 81.2
Depreciation 53.7 37.6 42.6 51.6 4.1 181.9 114.4 59.0
Non-operating income 21.7 21.5 0.8 11.4 90.7 49.0 28.2 73.8
# #
Nonrecurring items/dividend from SPVs 20.0 0.0 - 0.0 - 0.0 - -
PBT 151.2 103.3 46.3 109.4 38.2 416.7 214.9 93.9
Tax 30.3 18.2 66.5 (39.3) - 13.4 37.8 (64.6)
PAT 120.8 85.1 41.9 148.7 (18.7) 403.4 177.2 127.7
Share of profits/(losses) of asso. 0.0 0.0 - 0.0 0.0 - -
Share of profits/(losses) of MI 3.3 3.7 (9.8) 6.9 (52.1) 17.9 - -
PAT after MI and share of assoc. 117.5 81.5 44.2 141.7 (17.1) 385.4 177.2 117.5
PAT (%) 22.9 19.7 - 28.2 22.6 17.9
FDEPS (Rs) 3.5 2.5 44.2 4.3 (17.1) 11.6 5.3 117.5
#
Source: Company, Angel Research; Note: Dividend of Rs20cr from SPV is deducted from operating profit and has been put under extra-ordinary income

Exhibit 2: 1QFY2011 segmental performance (Consolidated)
Particulars 1QFY11 1QFY10 % chg 4QFY10 % chg FY10 FY09 % chg
Construction segment 330.1 274.9 20.1 312.0 5.8 1,024.2 567.2 80.6
BOT segment 203.6 160.7 26.7 201.1 1.2 729.7 454.3 60.6
Total income 533.7 435.6 22.5 513.1 4.0 1,753.8 1,021.5 71.7
Construction segment 95.2 50.5 88.4 57.8 64.6 200.6 101.3 98.0
BOT segment 175.8 137.1 28.2 184.6 (4.8) 647.4 365.7 77.1
EBITDA 271.0 187.7 44.4 242.4 11.8 848.0 467.0 81.6
Construction segment (%) 28.8 18.4 1040bp 18.5 1030bp 19.6 17.9 170bp
BOT segment (%) 86.3 85.3 100bp 91.8 (550)bp 88.7 80.5 820bp
EBITDAM (%) 50.8 43.1 770bp 47.2 360bp 48.4 45.7 270bp
Construction segment 5.9 6.3 (6.1) 4.8 23.1 22.5 10.2 120.3
BOT segment 60.2 40.5 48.9 76.7 (21.4) 226.8 127.4 78.0
Financial expenses 66.1 46.7 41.5 81.5 (18.8) 249.4 137.7 81.2
Construction segment 11.0 12.9 (15.2) 13.2 (16.8) 52.1 20.8 149.9
BOT segment 42.7 24.7 72.9 38.4 11.3 129.9 93.6 38.8
Depreciation 53.7 37.6 42.6 51.6 4.1 181.9 114.4 59.0
BOT segment 72.8 72.0 1.2 69.5 4.8 290.7 144.7 100.9
PBT 151.2 103.3 46.3 109.4 38.3 416.7 214.9 93.9
BOT segment 64.9 59.8 8.4 113.0 (42.6) 302.2 128.2 135.8
PAT 120.8 85.1 41.9 148.6 (18.7) 403.4 177.2 127.7

July 28, 2010 2


Exhibit 3: 1QFY2011 actual vs. Angel estimates
Particulars Estimates Actual Variation (%)
Revenue 714.2 533.7 (25.3)
Construction segment 503.2 330.1 (34.4)
Road BOT segment 211.0 203.6 (3.5)
EBITDA margin (%) 39.7 48.7 900bp
Construction segment 18.5 28.8 1,034bp
Road BOT segment 90.2 86.3 (386)bp
PAT 94.1 117.5 24.8
Construction segment 45.8 55.9 22.1
Road BOT segment 48.3 64.9 34.3

Exhibit 4: Road BOT project-wise toll revenue growth
Project Name 1QFY11 1QFY10 % chg 4QFY10 % chg(qoq) FY2010 FY2009 % chg(yoy)
^
Surat Dahisar 88.2 77.8 13.4 90.7 (2.8) 333.7 33.6 893.2
Mumbai- Pune 80.2 76.4 5.0 76.1 5.4 306.3 288.0 6.4
Thane Bhiwandi Bypass 13.3 11.2 18.8 13.0 2.3 47.2 40.3 17.1
Thane Ghodbunder 7.2 6.9 4.3 7.0 2.9 27.7 26.5 4.5
Pune - Nashik 4.8 4.2 14.3 4.8 - 18.1 16.4 10.4
Pune - Sholapur 3.6 3.6 - 3.5 2.9 13.3 12.7 4.7
Nagar Karmala Tembhurni 3.8 2.9 31.0 3.6 5.6 13.5 11.3 19.5
Mohol Mandrup Kamtee 1.7 1.7 - 1.4 21.4 6.3 6.5 (3.1)
Kharpada Bridge 1.9 1.8 5.6 1.8 5.6 6.7 7.1 (5.6)
Bharuch Surat ^^ 29.8 - - 31.7 (6.0) 66.3 - -
Kaman Paygaon ** - 0.9 - - - 2.2 3.6 (38.9)
Khambatki Ghat * - 1.2 - - - 1.2 13.1 (90.8)
Bhiwandi Wada # - - - - - - 1.6 -
Total 234.5 188.6 24.3 233.6 0.4 842.5 460.7 82.9
Source: Company, Angel Research; Note: * Concession period of Khambatki Ghat BOT project ended on May 3, 2009, # Concession period of Bhiwandi
^^
Wada BOT project ended on September 22, 2008, ^ Surat-Dahisar commissioned on February 20,2009, Bharuch Surat BOT Project commissioned on
September 25,2009, ** Kaman-Paygaon BOT Project concession period stopped from November 22, 2009.

July 28, 2010 3


Top line below estimates
IRB reported modest top-line growth of 23.6% to Rs512cr, well below our
expectations of Rs714cr. This was primarily due to modest growth of 20.1% in the
construction vertical, against over 50% growth in the last four quarters.
Management is awaiting commencement nod from NHAI on its four road BOT
projects, which dampened the construction segment’s top line during the quarter.
The consolidated OPM stood at 44.8% (40.1%) against our expectation of 39.7%,
aided by an all-time high construction vertical margin of 28.8%.
IRB’s current order book at Rs7,431cr (excluding O&M orders) provides revenue
visibility for its construction arm.

Exhibit 5: Quarterly revenue trend Exhibit 6: Quarterly EBITDA trend
600 90.0
300.0 60.0
81.1 52.4 48.7
80.0 80.0 49.5 49.1
500 76.5 250.0
46.0
50.0
70.0 42.5
37.5 40.1
400 60.0 200.0 40.0
56.3
50.0 150.0 30.0
300
40.0 100.0 20.0
200 30.0 50.0 10.0
23.6
20.0
100 - -
10.0
2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11
0 -
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
EBITDA (Rs cr, LHS) EBITDAM (%, RHS)
Net Sales (Rs cr, LHS) Growth (yoy %, RHS)

Source: Company, Angel Research Source: Company, Angel Research

…higher OPM boosts bottom line

IRB’s operating margin at the consolidated level outperformed our estimates,
primarily on account of (all time) high construction vertical margins leading to
higher-than-expected bottom line. Depreciation costs were in line with our
estimates, whereas interest costs came in below our expectations. Bottom line
registered 44.2% growth to Rs117.5cr (Rs81.5cr) against our expectation of
Rs94.1cr.

Exhibit 7: Quarterly bottom-line trend
28.2
160 30.0
140 22.9
20.9 22.0 25.0
120 20.4 19.7
100 16.0 20.0
80 13.6 15.0
60 10.0
40
20 5.0
0 -
2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

PAT (Rs cr, LHS) PATM (%, RHS)


July 28, 2010 4


Outlook and Valuation
NHAI has targeted to award orders worth Rs1lakh cr over the next one year, in line
with the long-term target of achieving 20km a day. We believe if NHAI is able to
achieve even 50% of its targets, then it would imply abundant opportunities for
road developers (read IRB). Further, the recent structural changes have also
lessened the vagaries in road development. Hence, we are optimistic on the road
segment. IRB has one of the largest domestic BOT project portfolios in the road
and highway sector comprising 17 projects. In light of the immense opportunities
that exist in the road sector in the near future along with IRB’s vast experience and
mutually dependent business model, we maintain our bullish stance on the
company. Moreover, IRB’s construction arm has a robust order book of Rs7,431cr
(excluding O&M orders) (7.2x FY2010 revenue), which lends high revenue
visibility.

Rationale for change in estimates

Modern Road Makers Private Limited (MRMPL), the construction arm of IRB,
reported 1QFY2011 top line below our estimates, primarily on account of the
recently secured road BOT projects (Goa-Karnataka, Pathankot-Amritsar, Jaipur-
Deol and Talegoan-Amravati) not commencing construction activity. These projects
with a project capitalisation of ~Rs4,300cr are to be executed over 30 months.
Management is awaiting clearance from NHAI to commence with the construction
work and expects revenue booking to a certain extent from these projects in
2QFY2011 and 3QFY2011.

In line with the management’s guidance, we have factored in delays in the
commencement of construction activity in these four road BOT projects and expect
construction to begin by 3QFY2011. Accordingly, for the full year, we have cut our
construction top-line estimates by 23.5% and 12.0%, respectively, for FY2011E
and FY2012E. Management expects to maintain construction vertical margins at
around ~20% going ahead, which we think is achievable and accordingly factor in
our assumptions, leading to a revision in margin estimates. However, delay in
construction commencement will eventually have a cascading effect in the
commencement of tolling going ahead. Hence, we factor a delay of six months in
tolling and expect tolling to commence from the beginning of 2HFY2014 as
against FY2014, which gets captured in our NPV computations for these four
projects. Accordingly, NPV/share for the four projects gets revised downwards.

Exhibit 8: Change in estimates
FY2011E FY2012E
Parameters Earlier estimates Revised estimates Earlier estimates Revised estimates
Variation (%) Variation (%)
Revenue (Rs cr) 3,352.1 2,777.7 3,915.6 3,579.8
(17.1) (8.6)
Construction(Rs cr) 2,432.0 1,860.2 2,790.3 2,454.5
(23.5) (12.0)
Road BOT segment(Rs cr) 917.5 917.5 1,125.3 1,125.3
- -
EBITDA margin (%) 37.3 42.2 38.0 40.5
490bp 250bp
PAT(Rs cr) 459.2 410.2 508.0 482.2
(10.7) (5.1)

July 28, 2010 5


We have valued IRB's business model on an SOTP basis at Rs275, where road BOT
SPVs have been valued on NPV basis (FY2012E) and have accorded a 10% growth
premium (Rs154/share) and the construction segment has been valued at 8x
FY2012E EV/EBITDA (Rs113/share). IRB's other investments have been valued at 1x
FY2010 book value (Rs8/share). We maintain Accumulate on the stock with a
Target Price of Rs275.

Exhibit 9: SOTP valuation summary
Business segment Methodology Rs cr IRB's stake(%) Rs/share % to target price
4 BOT Projects FCFE 270 100 8.1 3.0
Kharpada Bridge FCFE 29 100 0.9 0.3
Nagar-Karmala Tembhurni FCFE 69 100 2.1 0.8
Mohol-Mandup-Kamtee FCFE 41 100 1.2 0.5
Pune-Solapur FCFE 95 100 2.9 1.0
Pune-Nashik FCFE 157 100 4.7 1.7
Mumbai-Pune FCFE 1,611 100 48.5 17.6
Thane Ghodbunder FCFE 262 100 7.9 2.9
Surat Dahisar FCFE 178 90 4.8 1.8
Bharuch-Surat FCFE 624 100 18.8 6.8
IRDP Kolhapur FCFE 501 100 15.1 5.5
Goa Karnataka Border FCFE 203 100 5.7 2.1
Pathankot-Amritsar FCFE 255 100 6.4 2.3
Jaipur Deoli FCFE 458 100 8.4 3.1
Talegaon-Amravati FCFE 237 100 4.3 1.6
Total Road BOT Asset Portfolio Valuation 139.6
Value post 10% growth premium 153.5
Modern Road Makers Pvt. Ltd. EV/EBITDA 3,871 100 113.2 41.2
Land Parcel Valuation Book Value 135 66 2.7 1.0
Sindhudurg Airport Project Book Value 175 100 5.3 1.9
Total 274.7 100
Source: Company, Angel Research; Note: We have used cost of equity as 12.7% for computing net present values for the road BOT projects

July 28, 2010 6


Exhibit 10: Key assumptions
Traffic growth Toll hike Interest
Road project
rate (%) p.a. (%) rate
4 BOT Projects 7.0 6.0 N.A
Kharpada Bridge 8.0 6.0 N.A.
Nagar-Karmala Tembhurni 7.0 6.0 N.A.
Mohol-Mandup-Kamtee 7.0 6.0 N.A.
Pune-Solapur 7.0 6.0 N.A.
Pune-Nashik 7.0 6.0 N.A.
Mumbai-Pune 8.0 18 (every 3 years) 11.0
Thane Ghodbunder 7.0 6.0 N.A
Surat Dahisar 8.0 6.0 12.3
Bharuch-Surat 7.0 6.0 11.5
IRDP Kolhapur 7.0 6.0 11.5
Goa Karnataka Border 7.0 6.0 12.0
Pathankot-Amritsar 7.0 6.0 12.0
Jaipur Deoli 7.0 6.0 12.0
Talegaon-Amravati 7.0 6.0 12.0

Exhibit 11: Angel EPS forecast v/s consensus
Angel forecast Bloomberg consensus Variation (%)
FY2011E 13.8 14.6 5.5
FY2012E 15.3 16.4 7.2

July 28, 2010 7


Investment Arguments

Vast opportunity in the road sector IRB the prime beneficiary: IRB has some of
the very high-density, strategically aligned road stretched in its gamut. These high-
density stretches reduce the average payback period for a typical road BOT
project. The Government of India is aggressively focusing on road development
and expects awarding of road BOT projects worth Rs1lakh cr in FY2011, after a
dismal award activity in FY2009. About 34% of this proposed investment is
expected to come through the private sector, and we believe that this is where IRB
stands to benefit. Moreover, of the 2,986km awarded till February 2010, IRB has
been the forerunner by securing 12.8% of the projects.

Infrastructure and economy-linked play: IRB has an interdependent business model
wherein, the internal construction arm, MRMPL undertakes EPC work relating to
secured road BOT projects. While the time-bound construction work of secured
road BOT projects lends revenue visibility for the construction arm, any prior
completion of construction work ushers in revenue upsides from the road BOT (toll)
segment. Revenue from the toll segment is moreover linked with traffic intensity
(and pre-determined toll rate hikes), which is directly co-related with the economic
well being. (Elasticity of traffic to GDP stands at 1.25x). Thus, the company’s
interdependent business model and the expected improved economic scenario
lend revenue predictability for IRB. The positives of the business model and net
debt to equity at 1.2x reflect in the company’s strong operating cash flows, thereby
alleviating possible concerns over equity funding for new road BOT projects in
future.

July 28, 2010 8


Exhibit 12: Recommendation summary
Company CMP TP Rating Top line EPS Adj. P/E OB/
(Rs) (Rs) FY10 FY11E FY12E CAGR (%) FY10 FY11E FY12E CAGR (%) FY10 FY11E FY12E Sale
CCCL 86 - Neutral 1,976 2,444 2,871 20.5 5.0 6.0 7.5 22.5 17.2 14.4 11.5 2.3
Gammon 214 - Neutral 4,489 5,575 6,607 21.3 8.4 10.0 12.1 20.0 13.0 11.0 9.0 2.5
HCC 133 - Neutral 3,629 4,146 4,900 16.2 2.7 3.2 3.8 18.8 21.6 18.4 15.3 4.7
IRB Infra 263 275 Neutral 1,705 2,778 3,580 44.9 11.6 12.3 14.5 11.8 22.2 20.8 17.7 -
IVRCL 176 216 Buy 5,492 6,663 8,294 22.9 7.8 9.6 12.0 23.9 16.3 13.3 10.6 4.3
JP Assoc. 121 178 Buy 10,316 13,281 17,843 31.5 4.7 5.2 7.7 28.5 26.0 23.2 15.8 -
Punj 130 170 Buy 10,539 11,088 13,407 12.8 (11.1) 8.3 12.2 - - 15.8 10.7 2.8
NCC 178 - Neutral 4,778 5,913 6,758 18.9 7.8 10.0 10.7 17.4 22.8 17.8 16.6 3.6
Sadbhav 1,290 - Neutral 1,257 1,560 1,911 23.3 43.0 57.5 69.5 27.1 20.3 15.2 12.5 5.4
SI. 476 570 Buy 4,555 5,535 6,428 18.8 25.7 31.9 40.7 25.9 18.5 14.9 11.7 2.5
PEL 409 563 Buy 3,081 3,685 4,297 18.1 23.4 31.2 32.9 18.6 13.1 9.8 9.3 3.5
MPL 157 190 Buy 1,308 1,701 2,120 27.3 5.8 6.4 9.8 29.8 9.3 8.4 5.5 3.1
L&T 1,863 - Neutral 37,035 44,047 55,519 22.4 47.5 55.1 68.9 20.4 30.9 26.7 21.3 2.7


Exhibit 13: Recommendation summary - SOTP break-up
Company Core const. Real estate Road BOT Invst. in subsidiaries Others Total
Rs % to TP Rs % to TP Rs % to TP Rs % to TP Rs % to TP Rs
CCCL 90 100 - - - - - - - - 90
Gammon India 121 54 - - - - - - 104 46 225
HCC 53 41 59 46 16 13 - - - - 128
IRB Infra 113 41 3 1 154 56 5 2 - - 275
IVRCL 168 78 - - - - 48 22 - - 216
Punj Lloyd 170 100 - - - - - - - - 170
NCC 152 82 18 10 16 8 - - - - 186
Simplex In. 570 100 - - - - - - - - 570
Patel Engg 460 82 103 18 - - - - - - 563
Madhucon 98 52 4 2 - - 88 46 - - 190
L&T 1,447 79 - - - - 394 21 - - 1,841

July 28, 2010 9


Profit & loss statement (Consolidated)
Y/E March (Rs cr) FY2008 FY2009 FY2010 FY2011E FY2012E
Net sales 732.7 991.9 1,705.0 2,777.7 3,579.8
Other operating income - - - - -
Total operating income 732.7 991.9 1,705.0 2,777.7 3,579.8
% chg 139.7 35.4 71.9 62.9 28.9
Total expenditure 320.8 554.5 906.0 1,605.5 2,130.0
Net raw materials 158.9 305.4 450.0 838.9 1,127.6
Other mfg. costs 39.2 57.0 122.0 165.3 221.9
Personnel 95.3 134.5 284.0 445.8 583.5
Other 27.4 57.6 50.0 155.5 196.9
EBITDA 411.9 437.4 799.0 1,172.2 1,449.8
% chg 148.9 6.2 82.7 46.7 23.7
(% of net sales) 56.2 44.1 46.9 42.2 40.5
Depreciation 101.6 114.4 181.9 216.6 365.8
EBIT 310.3 323.0 617.1 955.6 1,084.0
% chg 174.8 4.1 91.0 54.9 13.4
(% of net sales) 42.3 32.6 36.2 34.4 30.3
Interest & other charges 195.8 137.7 249.4 418.4 462.3
Other income 52.0 29.6 49.0 23.6 43.4
(% of PBT) 31.2 13.8 11.7 4.2 6.5
Share in profit of associates - - - - -
Recurring PBT 166.5 214.9 416.6 560.8 665.1
% chg 273.4 29.1 93.8 34.6 18.6
Extraordinary expense/(Inc.) - - - - -
PBT (reported) 166.5 214.9 416.6 560.8 665.1
Tax 40.0 37.8 13.4 150.6 182.9
(% of PBT) 24.0 17.6 3.2 26.9 27.5
PAT (reported) 126.5 177.2 403.3 410.2 482.2
Add: Share of earnings of ass. - - - - -
Less: Minority interest (MI) 12.6 1.3 17.9 - -
Prior period items - - - - -
PAT after MI (reported) 113.9 175.8 385.3 410.2 482.2
ADJ. PAT 113.9 175.8 385.3 410.2 482.2
% chg 403.9 54.4 119.1 6.4 17.6
(% of net sales) 15.5 17.7 22.6 14.8 13.5
Basic EPS (Rs) 4.2 5.3 11.6 12.3 14.5
Fully diluted EPS (Rs) 4.2 5.3 11.6 12.3 14.5
% chg 357.3 26.6 119.2 6.4 17.6

July 28, 2010 10


Balance sheet (Consolidated)
Y/E March (Rs cr) FY2008 FY2009 FY2010E FY2011E FY2012E
SOURCES OF FUNDS
Equity share capital 332.4 332.4 332.4 332.4 332.4
Preference capital - - - - -
Reserves & surplus 1,288 1,398 1,733 2,077 2,476
Shareholders’ funds 1,621 1,730 2,066 2,409 2,808
Minority interest 28 60 60 60 60
Total loans 2,021 2,486 2,880 4,569 5,966
Deferred tax liability 3 18 18 18 18
Total liabilities 3,673 4,294 5,024 7,057 8,852
APPLICATION OF FUNDS
Gross block 2,219 2,460 3,386 4,995 8,025
Less: Acc. depreciation 334 444 602 818 1,184
Net block 1,885 2,016 2,784 4,177 6,841
Capital work-in-progress 889 1,455 1,233 1,554 479
Goodwill - - - - -
Investments 198 111 111 111 111
Current assets 959 1,033 1,446 1,990 2,478
Cash 522 415 467 633 641
Loans & advances 375 399 546 653 877
Other 62 218 434 704 959
Current liabilities 260 321 551 775 1,056
Net current assets 699 712 895 1,215 1,422
Mis. exp. not written off 2 1 - - -
Total assets 3,673 4,294 5,024 7,057 8,852

July 28, 2010 11


Cash flow statement (Consolidated)
Y/E March (Rs cr) FY2008 FY2009 FY2010E FY2011E FY2012E
Profit before tax 166.5 214.9 416.6 560.8 665.1
Depreciation 101.6 114.4 181.9 216.6 365.8
Change in working capital 41.9 120.0 132.0 153.1 198.5
Less: Other income 52.0 29.6 49.0 23.6 43.4
Direct taxes paid 40.0 37.8 13.4 150.6 182.9
Cash flow from operations 134.2 141.9 404.3 450.0 606.1
(Inc.)/Dec. in fixed assets (433.1) (806.9) (705.0) (1,929.7) (1,954.4)
(Inc.)/Dec. in Investments (156.8) 87.3 - - -
Other income 52.0 29.6 49.0 23.6 43.4
Cash flow from investing (537.9) (690.1) (656.0) (1,906.1) (1,911.0)
Issue of equity 1,089.9 (1.3) - - -
Inc./(Dec.) in loans (496.7) 464.6 394.5 1,688.9 1,396.3
Dividend paid (incl. tax) 3.0 65.2 49.9 66.5 83.1
Others 63.2 42.6 (41.0) - -
Cash flow from financing 653.5 440.7 303.6 1,622.4 1,313.3
Inc./(Dec.) in cash 249.9 (107.4) 51.9 166.3 8.4
Opening cash balances 272.3 522.1 414.7 466.6 632.9
Closing cash balances 522.1 414.7 466.6 632.9 641.3

July 28, 2010 12


Key Ratios
Y/E March FY2008 FY2009 FY2010E FY2011E FY2012E
Valuation ratio (x)
P/E (on FDEPS) 76.7 49.7 22.7 21.3 18.1
P/CEPS 40.5 30.1 15.4 13.9 10.3
P/BV 5.4 5.0 4.2 3.6 3.1
Dividend yield (%) 0.0 0.6 0.5 0.6 0.6
EV/Sales 14.0 10.9 6.5 4.6 3.9
EV/EBITDA 24.9 24.7 14.0 10.8 9.7
EV/Total assets 2.8 2.5 2.2 1.8 1.6
Per share data (Rs)
EPS (Basic) 3.4 5.3 11.6 12.3 14.5
EPS (fully diluted) 3.4 5.3 11.6 12.3 14.5
Cash EPS 6.5 8.7 17.1 18.9 25.5
DPS 0.0 1.5 1.2 1.7 1.7
Book value 48.8 52.1 62.1 72.5 84.5
DuPont analysis
EBIT margin 42.3 32.6 36.2 34.4 30.3
Tax retention ratio 76.0 82.4 96.8 73.1 72.5
Asset turnover (x) 0.3 0.3 0.4 0.5 0.5
ROIC (post-tax) 8.1 7.6 14.2 12.7 10.7
Cost of debt (post-tax) 6.6 5.0 9.0 8.2 6.4
Leverage (x) 3.3 1.1 1.2 1.4 1.8
Operating RoE 13.4 10.3 20.3 19.1 18.5
Returns (%)
ROCE (Pre-tax) 9.3 8.1 13.2 15.8 13.6
Angel RoIC (Pre-tax) 14.3 13.8 21.5 23.3 17.2
RoE 11.4 10.5 20.3 18.3 18.5
Turnover ratios (x)
Asset turnover (gross block) 0.3 0.4 0.6 0.7 0.5
Inventory/Sales (days) 15 47 66 71 81
Receivables (days) 39 5 4 4 4
Payables (days) 118 77 71 64 70
Working capital cycle (ex-cash) (days) 78 87 78 66 69
Solvency ratios (x)
Net debt to equity 0.9 1.2 1.2 1.6 1.9
Net debt to EBITDA 3.6 4.7 3.0 3.4 3.7
Interest coverage (EBIT/Interest) 1.6 2.3 2.5 2.3 2.3

July 28, 2010 13


Research Team Tel: 022 - 4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.

Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,
nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While
Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,
compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.

Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or
other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in
the past.

Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please
refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and
its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement (Company name) IRB Infra
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock Yes
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No

Note: We have not considered any Exposure below Rs 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to 15%) Sell (< -15%)

July 28, 2010 14

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