IRB Infra bags yet another order for Jaipur Deoli 18.7 Km road project. Maintain Buy on the stock.

 
IRB continued its journey of bagging new road projects. In the past few days the company has acquired 3 orders-Goa Karnataka, Pathankot-Amritsar & now Jaipur-Deoli. The latest project in Rajasthan is for about Rs 1500 cr with a concession period of 25 years & viability gap funding from the govt to the tune of Rs 306 cr. The project is for 30 months duration. We are in the process of obtaining details on traffic on this road patch after which we will be able to calculate incremental value addition for the company. However on the first cut estimates & on basis of P/BV we estimate this project adds roughly Rs 15 per share to the company's value. However FCFE for the project will be substantially different & can be calculated only after more details on traffic etc are available. In spite this order we understand that company does not have any risk of equity dilution. In fact according to our estimates the company can go ahead for another Rs 1000 crore worth of projects. We maintain Buy on the stock. We are in the process of revising our target price upwards.