IRB Infra News: Big Order In Gujarat, Toll Hike Expected In June, Earnings To Grow! | Anil Yadav

Let me now welcome on board Anil Yadav, Director, IRB Infrastructure joining in on the show right now. Anil, hi, morning, welcome to ET. Now you know just looking at your quarterly performance largely in line set of numbers, tell me what’s the growth guidance looking like for EPC projects going forward. Thank you. This year if you look at the quarter, we had almost 47% income was up by 47% and PAD was up by 4545%. And as we operate in two segments, construction and BOT, we have seen a growth in the both the segments. And then one time expense net of tax that was close to 54 crores. If you’ll remove that impact of one time expenses, then the profit is close to 242 crores, which is almost 87% higher as compared to the same quarter of the last year. And going forward, I think we have a good visibility in terms of the toll revenue. We have started a couple of projects that is TOT 12 and TOT 13 from 1st of April this financial year and we have even reported the April toll numbers and we have seen a robust growth of 29% on in the toll business as well. So we expect I think with respect to the construction around 10 to 15% growth and toll business should grow in range of 15 to 20%, OK. But can we have execution for any of the projects become slower because of because of elections? I think on the execution there is no impact on the execution. In fact, we have reported the largest construction revenue as far as this last quarter is concerned. Construction is going on smoothly, business with NHAI, how much is that business and how do you see that business going as new orders are coming from NHAI and FY20 6. I think if you look at the business outlook, there is a clear cut saved from the mode of award as we discussed last time. Now BOT earlier used to be if you look at the last almost 8 to 10 years LA almost a decade BOT was only 5 to 7% of the total pie. And now the government is pushed for more private parties participation and BOT is coming in more meaningful way. That is the almost 40 to 50% will come on Bo and company focuses on BOT&TOT project. So almost there is 2 trillion worth of opportunity which is going to unfold in the near future on a BOT basis. And in past we had almost 30 plus percentage kind of market share in the BOT&TOT space even if you considered conservative 1520%. So that translates almost 20 to 30,000 crores kind of opportunity going to unfold over the period of one years in next one year. And could you give us a sense on at what rate at which you expect your total toll business to grow? One is linear, one is organic growth just for the benefit of our views, more traffic means more growth. Second is that you take a price hike in accordance with inflation. How do you see a combination of both impacting a toll collection for FY25? Yes. So I think linear growth there are two variable factor, one is traffic, another is tariff and traffic typically ranges from six, 6, 1/2 percent kind of growth what we have witnessing as of now and around close to 4% kind of tariff increase and in that should translate around 11 percent kind of organic growth. And we have added projects in the private invite and I think 1015% growth should be coming from the addition of the new project. So I think around 20% growth in their toll business in coming year both IRB and private invite put together in the Concord as well the company has spoken about the construction vertical clocking in a 15% CAGR over the next two to three years. Can you tell us a little bit more in terms of what will drive this growth? What is going to be the guidance when it comes to your margins in terms of revenue potential? I think if you look at the historically, historically the construction business since listing in 2008, the company has grown, the construction business has grown at a CAGR of 17%. And considering the order pipeline and the expected order wins, we expect to grow minimum in range of 15%. But considering the now the BOT pipeline is increasing significantly the order, the growth in the future years that is in the acquired 26 can be even higher than the 15%. But on the conservative side, we are guiding around 15% growth on the construction business, OK. Is there any plan to monetize on land bank? You’ve got a lot of land bank, do you are there any plans to monetize that near term soon? I think as far as land bank is concerned, if I will look at total asset base of companies almost 80,000 crores, the investment in non core will will be less than 1%. We have intended that at appropriate time we will monetize that either through a joint develop that will be through a joint developer joint development and there the company will not be incurring any additional CapEx on the same. Why is this? Why have you not been able to monetize on this land? This was awarded to you in terms of when you started developing the highway? I understand that the real estate cycle went through a hard time couple of years ago, but now that the real estate cycle is blooming, what is stopping you from monetizing that land bank? I think you are correct that in past the real estate cycle was not good. Now things have started improving and probably we will look for the monetization through a joint development. But for us that remains still remains a very insignificant part of the total business. Good to have you. Thank you for giving us those insights. That’s the view coming in from the management of IRB Infra dot projects and orders will go up from NHAI. A 30% market share will be maintained in the BOT segment. If you like this video then like, share and subscribe to ET Now.