Stock Review: IRB INFRASTRUCTURE

IRB is well positioned and focused in the road sector. It currently has 3,413 lane km under operation and another 2,322 lane km under development, which will be operational in phases by 2014. More importantly, most of its build-operate-transfer (BOT) projects are at strategic locations like Mumbai-Pune, Mumbai-BharuchSurat, Pune-Solapur, where prospects for traffic is relatively better. The company has an order book of `8,985 crore, which is almost nine times its annual construction revenue and accounted for 57 per cent of total revenue in 2009-10. Analysts expect strong growth in revenue and 15-18 per cent growth in net profits over 2011-12 and 2012-13. The stock has corrected from a high of `312.8 in August last year to `212.45 and now trades 14 times its FY12 estimated earnings. Analysts have pegged its sum-of-theparts value at `290.