IRB Infra prequalified for 41,000 crore projects

IRB Infra prequalified for 41,000 crore projects

Mumbai: IRB Infrastructure Developers Ltd has been pre-qualified for 41,000 crore of projects, a top executive told Reuters on Wednesday, after the toll road builder posted a forecast-beating June quarter results.

“We stand qualified for almost 41,000 crore (410 billion rupees) worth of projects, and bidding is on currently," its chairman & managing director Virendra D. Mhaiskar said.

The firm has six projects under implementation, he said.

India built about 1,800 kilometres of roads in 2010/11, but will award a record 7,300 kms of road building contracts this year, worth $12 billion, a top National Highways Authority of India official said in June.

The toll road builder posted a 13.6% rise in net profit of 134 crore for June quarter, beating consensus estimates of it posting a net profit 114 crore.

The revenues came in from both the streams—construction and toll—with construction contributing 572 crore and toll providing 229 crore, Mhaiskar said.

No Immediate Fund Raising Plans

The Mumbai-based firm also received a board approval to raise upto 1,200 crore, including a share sale option. The firm’s share prices rose 4% following the stake sale news.

“This is an enabling resolution," Mhaiskar said, adding, the company did not have any immediate fund-raising plans.

“The market misunderstood that they have a plan to raise funds," Sneha Poddar, research analyst at Sharekhan said, adding the prices were corrected after the company clarified the news on television.

“Other wise, the results have been very good," she added.

IRB Infrastructure has an order book of 11,100 crore as on 30 June, which would be executed over the next 3-3.5 years, its chief financial officer Anil Yadav said.

The company has a net debt of 3,845 crore as on end of the reporting quarter, which is expected to increase depending on the projects it wins, Yadav added.

Sharekhan’s Poddar said she expects IRB Infrastructure to revise profit guidance for the fiscal year upwards in the third quarter from the present 20%.

“Normally, the second half is very good for all the construction companies, compared with first half where there could be negative surprises," Poddar said.

The company was expecting to post 15%-20% rise in both net profit and net sales in FY12, Mhaiskar told Reuters in May.

Shares of the company closed up 0.81% at 186.95 in a weak Mumbai market.