3QFY2013 Result Update | Infrastructure

February 6, 2013

IRB Infrastructure
Performance Highlights
Quarterly highlights - Consolidated
Y/E March (` cr) Net sales Op. profit Net profit 3QFY13 914 408 143 3QFY12 746 342 131 2QFY13 845 381 121 % chg (yoy) 22.5 19.4 8.6 % chg (qoq) 8.1 7.1 18.0

BUY
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Net debt Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others Abs. (%) Sensex IRB 3m 4.4 1.4 1yr 11.4 (26.6) 62.7 3.3 22.3 11.7 3yr 23.4 (49.4) Infrastructure 4,131 6,645 1.4 210/100 648,094 10 19,640 5,959 IRBI.BO IRB@IN

`124 `164
12 Months

Source: Company, Angel Research

For 3QFY2013, IRB Infrastructure Developers (IRB) reported a healthy set of numbers, above our expectations on the profitability front. Although, the companys revenue came slightly below our expectation, but owing to better-than-expected performance at the EBITDAM level and lower tax expense, earnings were higher than estimates. In accordance with its strategy to declare ~20% of post-tax consolidated profit towards dividend, IRB declared an interim dividend of `1/share. Strong performance continues: IRB reported a net consolidated revenue of `914cr for 3QFY2013 (our estimate was of `930cr), an increase of 22.5% yoy, owing to higher-than-expected E&C revenue from its under construction projects. The E&C segment reported a revenue of `666cr registering a growth of 26.7% yoy, and the BOT segment witnessed a growth of 10.6% yoy to `280cr. On the EBITDAM front, IRBs margin declined by 117bp to 44.6%, however was higher than our estimate of 44%. Strong execution in its under-construction BOT projects led to EBITDAM of 29.6% (including other income) for the E&C segment. The interest cost came in at `159cr, higher by 12.3% on a yoy basis. At the earnings front, IRB reported a growth of 8.6% yoy to `143cr, above our estimate of `136cr on account of betterthan-expected operating performance and lower tax expense during the quarter. Outlook and valuation: IRB has a robust order book of `7,100cr (2.8x FY2013E E&C revenue, excluding O&M orders), which lends revenue visibility. IRB is currently pre-qualified to submit bids for projects worth `22,436cr and is targeting order inflow of `3,000cr-4,000cr over FY2014. The stock trades at FY2013E and FY2014E P/B of 1.2x and 1.1x respectively. We maintain our Buy view on the stock with a target price of `164.

Key financials (Consolidated)

Y/E March (` cr) Net Sales % chg Adj.Net Profit % chg EBITDA (%) FDEPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x) OB/sales(x) Order inflow %chg
Source: Company, Angel Research

FY2011 2,438 43.0 452 17.4 44.6 13.6 8.8 1.6 20.2 14.1 3.0 6.8 6.1 5,514 10.2

FY2012 3,133 28.5 496 9.6 43.7 14.9 8.0 1.4 18.8 12.4 2.9 6.7 3.0 (1,058) -

FY2013E 3,843 22.7 563 13.5 43.7 16.9 7.1 1.2 18.4 10.7 3.1 7.2 2.9 3,542 -

FY2014E 4,212 9.6 593 5.3 43.6 17.8 6.7 1.1 17.0 9.3 3.4 7.9 3.4 4,105 15.9

Viral Shah
022-39357800 Ext: 6842 [email protected]

Please refer to important disclosures at the end of this report

3QFY2013 Result Update | India Research

Exhibit 1: 3QFY2013 performance (Consolidated)

Y/E March (` cr) Income from operations Total expenditure Operating profit OPM (%) Interest Depreciation Non operating income Nonrecurring items/Div. from SPV's Profit Before tax Tax PAT Share of Profits/ (Losses) of Asso. Share of Profits/ (Losses) of MI PAT after MI and Share of Assoc. PAT (%) FDEPS (`)
Source: Company, Angel Research

3QFY13 914 506 408 44.6 159 113 33 168 27 141 (1) 143 15.6 4.3

3QFY12 746 404 342 45.8 142 72 34 161 29 132 1 131 17.6 4.0

% chg(yoy) 22.5 25.2 19.4 (117) bp 12.3 55.9 (3.1) 4.5 7.0 (325.7) 8.6 (200)bp 8.6

2QFY13 845 465 381 45.0 148 111 33 155 37 119 (2) 121 14.3 3.6

% chg(qoq) 8.1 8.9 7.1 (40) bp 7.7 1.9 (1.1) 8.5 19.0 (36.8) 18.0 131 bp 18.0

9MFY2013 2,739 1,525 1,214 44.3 461 332 98 519 119 400 (6) 406 14.8 12.2

9MFY2012 2,283 1,290 993 43.5 401 195 92 489 110 379 3 376 16.5 11.3

% chg(yoy) 20.0 18.2 22.3 85 bp 15.2 69.9 6.8 6.2 8.5 5.5 8.0 (165) bp 8.0

Exhibit 2: Segmental revenue break-up (Consolidated)

Particulars Construction segment (including) OI) BOT segment Total Income Construction segment BOT segment EBITDA Construction segment (%) BOT segment (%) EBITDAM (%) Construction segment BOT segment Financial expenses Construction segment BOT segment Depreciation & Amortisation Construction segment BOT segment PBT Construction segment BOT segment PAT after minority interest
Source: Company, Angel Research

3QFY13 666 280 947 197 243 441 29.6 86.7 46.6 61 99 159 14 99 113 123 46 168 83 59 141

3QFY12 526 253 779 147 229 375 27.9 90.2 48.2 32 110 142 14 58 72 101 60 161 69 63 132

% chg 26.7 10.6 21.5 34.4 6.4 17.4 171 bp (345)bp (163) bp 91.4 (10.5) 12.3 (2.4) 70.3 55.9 21.7 (24.1) 4.5 19.5 (6.7) 7.0

2QFY13 622 257 878 187 227 414 30.1 88.2 47.1 60 88 148 14 97 111 113 42 155 77 42 119

% chg 7.2 9.2 7.8 5.5 7.3 6.5 (49) bp (148) bp (56)bp 0.7 12.6 7.7 2.3 1.9 1.9 8.4 8.9 8.5 7.5 40.3 19.0

9MFY2013 2,038 799 2,837 611 702 1,312 30.0 87.8 46.3 181 280 461 40 292 332 389 130 519 264 135 400

9MFY2012 1,650 724 2,375 442 643 1,085 26.8 88.8 45.7 92 308 401 42 153 195 307 181 489 211 167 379

% chg 23.5 10.3 19.5 38.3 9.1 21.0 321 bp (98)bp 58 bp 96.7 (9.2) 15.2 (4.0) 90.2 69.9 26.6 (28.4) 6.2 25.0 (19.1) 5.5

February 6, 2013

3QFY2013 Result Update | India Research

Exhibit 3: 2QFY2013 Actual vs Angel estimates

Parameter (` cr) Revenue EBITDA Interest PBT Tax PAT
Source: Company, Angel Research

Estimates 930 409 154 178 45 136

Actual 914 408 159 168 27 143

Variation (%) (1.8) (0.4) 3.6 (5.6) (39.2) 4.8

Sturdy execution continues

IRB reported a net consolidated revenue of `914cr in 3QFY2013 (our estimate was `930cr), an increase of 22.5% yoy, owing to higher-than-expected E&C income from under-construction projects (Jaipur-Deoli ~`142cr, Talegaon-Amravati ~`159cr, Pathankot-Amritsar ~`143cr and Tumkur-Chitradurga ~`200cr). The E&C segment reported a growth of 26.7% yoy to `666cr (including other income of `22cr). The BOT segment revenues reported a revenue growth of 10.6% yoy to `280cr in 3QFY2013. Completion achieved by IRB on various under-construction projects is as following: Jaipur-Deoli 90%; Talegaon-Amravati 90%; Pathankot-Amritsar 73%; and Tumkur-Chitradurga 62%. Further IRB is looking to achieve completion for Jaipur Deoli and Talegaon Amravati in 4QFY2013 while for Pathankot-Amritsar and Tumkur-Chitradurga the completion is expected to be achieved by June 2013 and December 2013 respectively.

Under-construction/development projects update

Kolhapur project: A state government appointed committee visited the site on February 1, 2013 and is likely to submit its report validating the substantial completion of the project, post which IRB would be able to commence toll collection. MVR infra: MVR Infrastructure and Tollways Pvt Ltd has become a subsidiary of the company from October 1, 2012. The gross toll collection revenue for the quarter stood at `15cr. Ahmedabad-Vadodara: The company has received the necessary clearance for the project and has started toll collection on the existing four lane expressway from January 1, 2013. Goa-Kundapur: IRB is waiting for LOA from NHAI for this recently bagged project; once received, it would commence construction activity on the project. Sindhudurg airport project: IRB has got all the necessary clearances for a greenfield airport in Sindhudurg district in Maharashtra and expects the construction to start soon. The total project cost is estimated to be `350cr and the EPC contract for the project has been awarded to L&T. The project has a concessionaire period of 95 years which includes 18 months of construction period.

February 6, 2013

3QFY2013 Result Update | India Research

Exhibit 4: Strong performance continues

1,200 1,000 11.5 800 600 400 801 736 746 848 980 845 914 200 0 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 Net Sales (` cr, LHS) Growth (yoy %, RHS) 56.5 50.1 10.6 60.0 22.3 14.9 22.5 50.0 40.0 30.0 20.0 10.0 -

Exhibit 5: Segmental break-up of revenue (` cr)

800 700 600 500 400 300 200 597 232 528 238 526 253 625 257 750 262 622 257 666 280 100 0 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 E&C (` cr) BOT (` cr)

Source: Company, Angel Research

Source: Company, Angel Research

BOT toll revenue

On the toll collection front, for 3QFY2013, Surat-Dahisar, Mumbai-Pune and Bharuch-Surat projects witnessed 8.7%, 5.1% and 4.8% growth in toll revenue on a yoy basis, respectively. Adjusted for the hike in toll rates and ban in mining activity, Bharuch-Surat and Tumkur-Chitradurga saw a decline in traffic growth for the quarter. Overall, on the toll collection front, IRB reported a growth of 10.7% yoy to `357cr in 3QFY2013 with an average toll collection of `4cr/day from its existing BOT portfolio. IRB expects toll revenue to grow around 12% on a yearly basis as a result of higher WPI and traffic growth.

Exhibit 6: Road BOT project-wise toll revenue growth

Project Name Surat Dahisar BOT Project^ Mumbai Pune BOT Project Thane Bhiwandi Bypass 4 Lane BOT Project Thane Ghodbunder BOT Project Pune Nashik BOT Project Pune Sholapur BOT Project Nagar Karmala Tembhurni BOT Project Mohol Mandrup Kamtee BOT Project Kharpada Bridge BOT Project Bharuch Surat BOT Project
$

3QFY13 116 105 17 8 6 4 4 2 2 39 0 0 39 15 357

3QFY12 106 100 16 8 6 4 4 2 2 37 0 0 38 0 322

% chg 8.7 5.1 8.2 5.3 3.4 2.4 8.6 (5.3) 5.0 4.8 3.7 10.7

2QFY13 103 104 16 7 6 4 4 2 2 40 0 0 40 0 327

% chg(qoq) 12.8 1.2 7.5 8.2 (1.6) 4.9 0.0 (5.3) 10.5 (1.8) 0.0 0.0 (0.3) 9.2

9MFY2013 325 313 50 23 18 13 11 6 6 117 0 0 120 15 1016

9MFY2012 294 298 46 21 17 12 11 6 6 106 0 0 88 0 906

% chg(yoy) 10.2 4.8 9.6 7.9 4.7 5.6 4.7 0.0 3.2 10.7 0.0 0.0 0.0 12.2

Kaman Paygaon BOT Project ** Khambatki Ghat BOT Project * Tumkur Chitradurga# Ommalur -Salem- Namakkal #* Total

Source: Company, Angel Research; Note: * Concession period of Khambatki Ghat BOT project ended on May 3, 2009, ^ 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, # Tumkur Chitradurga Project commissioned on June 4, 2011; #* Project acquired in October-2012 by purchase of 74% of equity stake in the Project

February 6, 2013

3QFY2013 Result Update | India Research

Impressive show on the EBITDA and earnings front

On the operating front, IRB reported an EBITDAM of 44.6% for the quarter, higher than our estimate of 44%. Further, the E&C segments EBITDAM at 29.6% (including other income) was led by strong execution of its under-construction BOT projects. The Management expects to maintain these margins going ahead as well, given that input prices are unlikely to change significantly. On the BOT front, the company reported an EBITDAM of 86.7%, registering a decline of 345bp yoy. Depreciation increased by 55.9% yoy to `113cr and was in-line with our estimate. Interest cost came in at `159cr, higher by 12.3% on a yoy basis. At the earnings front, IRB reported a PAT of `143cr for the quarter (above our estimate of `136cr), a growth o 8.6%, on account of better-than-expected operating performance and lower tax rate.

Exhibit 7: EBITDA margin steady

450 400 350 300 250 200 150 100 329 321 342 381 425 381 408 50 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 EBITDA (` cr), LHS) EBITDAM (%, RHS) 41.1 43.7 45.8 44.9 43.4 45.0 44.6 48.0 46.0 44.0 42.0 40.0 38.0 36.0

Exhibit 8: Healthy performance on the earnings front

160 140 120 100 80 60 40 134 110 131 120 142 121 20 0 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 PAT (` cr, LHS) PATM (%, RHS) 143 16.7 15.0 17.6 14.2 14.5 14.3 15.6 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 -

Source: Company, Angel Research

Source: Company, Angel Research

February 6, 2013

3QFY2013 Result Update | India Research

Outlook and valuation

We have revised our estimates marginally upwards for FY2013 owing to betterthan-expected performance by IRB.

Exhibit 9: Change in estimates

FY2013E Earlier Estimates Revenues (` cr) EBITDA Margins (%) PAT (` cr)
Source: Company, Angel Research

FY2014E Variation (%) 0.0 1.4 0.6 Earlier Estimates 4,212 43.6 593 Revised Estimates 4,212 43.6 593 Variation (%) 0.0 0.0 0.0 3,843 43.7 563

Revised Estimates

3,843 43.1 560

In accordance with its strategy to declare ~20% of post-tax consolidated profit towards dividend, IRB declared an interim dividend of `1/share during the quarter. IRB has a robust order book of `7,100cr (2.8x FY2013E E&C revenue, excluding O&M orders), which lends revenue visibility. Although a slowdown in order awarding by NHAI in road sector has been witnessed in 9MFY2013; IRB expects ordering activity to improve going ahead. IRB is currently pre-qualified to submit bids for projects worth `22,436cr and is targeting order inflow of `3,000cr4,000cr over FY2014. We have used sum-of-the-parts (SOTP) method to value the stock. We value the construction business at a P/E of 5x FY2014E earnings and IRBs BOT projects on a DCF basis at a CoE of 14%. We have not included the Sindhudurg airport project, real estate business and the 4-star hotel in Kolhapur in our SOTP valuation. We maintain our Buy rating and target price of Rs164, indicating an upside of 37%.

February 6, 2013

3QFY2013 Result Update | India Research

Exhibit 10: SOTP break-up

Particulars IRB's construction business Total Road BOT projects Thane Bhiwandi Bypass Kharpada Bridge Nagar - Karnala - Tembhurni Mohol - Mandrup - Kamtee Pune - Solapur Pune - Nashik Mumbai - Pune Thane Ghodbunder Surat Dahisar Bharuch - Surat IRDP, Kolhapur Pathankot - Amritsar Talegaon - Amravati Jaipur- Deoli Tumkur - Chitradurga Ahmedabad- Vadodara Omallur Salem -Namakkal Total Real Estate Net debt Grand Total Source: Company, Angel Research Real Estate 1,500 0 Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll Toll 330 29 59 46 103 152 1600 126 226 217 251 453 398 480 286 (3,00) 65 4,519 0 (770) 5,465 10 1 2 1 3 5 48 4 7 7 8 14 12 14 9 (9) 2 136 0 (23) 164 6.0 0.5 1.1 0.8 1.9 2.8 29.3 2.3 4.1 4.0 4.6 8.3 7.3 8.8 5.2 (5.5) 1.2 82.7 0.0 (14.1) 100.0 No value ascribed given the pending court case Standalone net debt NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% NPV at CoE of 14% Segment Construction Driver 3,43 Multiple 5 Value (` cr) 1,716 1,716 Value per share (`) 52 52 Proportionate stake (%) 31.4 31.4 Basis P/E of 5x one year rolling forward earnings

Exhibit 11: Key assumptions

Project Status KM Issuing Auth. State Concession (Yrs) Con. Start Con. End TPC (` cr) Equity (` cr) Debt (` cr) Grant (` cr) Traffic Grth (%) Toll inc (%) Int Rate (%) 4 BOT Kharpada Projects Oper. 24 PWD Mah. 18.5 Jan-99 May-17 104 34 70 5% 5% Oper. 1 MORTH Mah. 17.8 NKT Oper. 60 PWD Mah. 15.0 MMK Oper. 33 PuneSolapur Oper. 26 Pune- MumbaiNashik Pune Oper. 30 Oper. 206 Thane BharuchGhod Surat Oper. 15 Surat Dahisat IRDP Kolhapur PathankotAmritsar Jaipur Deoli TalegaonTumkurAmravati Chitradurga A'bad Baroda Oper. Under Dev. Under Dev. Under Dev. Under Dev. Under Dev. 65 NHAI Gujarat 15.0 Jan-07 Jan-22 1,470 198 1,272 5% 7/6/5% 10.8% 240 NHAI Guj./Mah 12.1 Feb-09 Mar-21 2,535 785 1,750 5% 5% 10.5% 50 MSRDC Mah. 30.0 Jan-09 Jan-39 430 172 258 (27.0) 5% 5% 11.5% 102 NHAI Punjab 20.0 Apr-10 Mar-30 1,442 391 924 126.9 5% 5% 10.5% 146 NHAI Rajasthan 25.0 Apr-10 Mar-35 1,705 499 900 306.0 5% 5% 10.5% 67 NHAI Mah. 22.0 Apr-10 Mar-32 885 194 475 216.0 5% 5% 10.5% Under Dev. Under Dev. 114 NHAI Karnataka 26.0 Jun-11 May-37 1,142 311 831 140.4 5% 5% 10.5% 102 NHAI Gujarat 25.0 Apr-12 Apr-37 4,920 1,420 3,500 6/5% 5% 11.0%

PWD MORTH MORTH Mah. 16.0 Mah. 16.0 Mar-03 Mar-19 63 18 45 5% 3% Mah. 18.0 Sep-03 Sep-21 74 6 68 5% 5% -

MSRDC MSRDC Mah. 15.0 Aug-04 Aug-19 1,292 105 1,187 5% #18% 10.6%
$

Mah. 15.0 Dec-05 Dec-20 249 32 217 5% 5% -

Nov-97 Nov-01 May-02 Aug-15 32 10 22 5% 0% Dec-16 May-18 37 15 22 5% 5% 18 7 11 5% 5% #

Source: Company, Angel Research, Note: Once in three years; IRB had shared 38% of its FY2011 revenue with NHAI and the same increases by 1% every year; @ IRB is expected to pay a sum of `309.6cr to NHAI from FY2013 and the sum increases by 5% every year

February 6, 2013

3QFY2013 Result Update | India Research

Exhibit 12: Angel EPS forecast vs consensus

Angel forecast FY2013E FY2014E
Source: Company, Angel Research

Bloomberg consensus 15.8 16.0

Variation (%) (1.6) 6.5

16.9 17.8

Investment arguments
Integrated business model: IRBs integrated business model ensures the timely completion of projects, reduces its reliance on subcontractors and controls costs. Further, it allows capturing the entire value in the BOT development business, including EPC margins, developer returns and operation and maintenance (O&M) margins. OB/Sales provide good revenue visibility: The order book of `7,100cr, excluding O&M orders (2.8x FY2013E E&C revenue), lends good revenue visibility for the next few years. Negligible dependence on capital markets: IRBs internal accruals (cash flows from the E&C and BOT segments) would substantially fund equity requirement of its current portfolio. Further, the company would be able to keep its debt-equity position within reasonable limits.

Concerns
Delay in order awarding: IRB, being a road-focused player, is dependent on NHAI for road awarding activity. Thus, any slowdown from NHAIs end would affect IRBs order inflow. However, given the huge bidding pipeline of NHAI, IRB should perform well, as it is one of the market leaders. Interest rate: BOT projects are inherently high-leverage projects. Hence, IRBs business model is vulnerable to interest rate fluctuations, and any hike in interest rates could increase the companys interest costs. Commodity risks: Road players are facing pressures from the recent price inflation in commodities such as cement and steel, which directly affect margins.

Company background
Incorporated in 1998, IRB is the pioneer and one the largest players in the road BOT business in India, with strong in-house integrated execution capabilities. IRBs road business can be divided into two verticals: 1) engineering and construction (E&C); and 2) toll collection and maintenance. The E&C arm complements its BOT vertical and leads to time and cost control for projects in hand/under development. The company also has one airport project, which is at a very nascent stage; decent land bank; and one small wind mill project.

February 6, 2013

3QFY2013 Result Update | India Research

Exhibit 13: Recommendation summary

Company ABL CCCL IRB Infra ITNL IVRCL JP Assoc. L&T NCC Punj Lloyd Sadbhav Simplex In. Unity Infra CMP 224 15 199 203 33 73 43 51 121 179 39 TP 268 164 225 100 Rating FY12 Buy Sell Accu. Buy Buy 1,500 2,048 3,133 5,606 6,178 12,853 53,171 5,250 2,676 6,010 1,973 - Neutral Top-line (` cr) FY13E 1,866 2,262 3,843 6,564 4,249 13,842 60,666 5,947 11,892 2,344 6,906 2,180 FY14E 2,131 2,522 4,212 7,054 6,897 15,863 69,525 6,569 13,116 2,804 8,053 2,455 19.2 11.0 15.9 12.2 5.7 11.1 14.3 11.9 11.5 2.4 15.8 11.5 22.6 (0.5) 14.9 25.6 0.6 4.8 64.3 1.4 2.8 9.3 18.1 14.0 EPS (`) CAGR (%) FY12 FY13E FY14E CAGR (%) 24.3 1.5 16.9 26.3 0.3 3.7 63.2 3.1 1.8 7.2 23.2 13.3 27.0 2.7 17.8 29.0 3.3 4.6 75.1 4.1 3.2 8.7 31.3 15.0 9.3 9.3 6.5 136.8 (2.8) 8.1 71.4 7.8 (3.5) 31.7 3.5 FY12 9.9 13.3 7.9 15.2 23.6 30.5 18.3 13.0 9.9 2.8 P/E 9.2 9.8 11.7 7.7 20.0 24.0 13.7 28.0 16.9 7.7 2.9 8.3 5.5 11.2 7.0 9.9 16.1 20.2 10.4 15.8 14.0 5.7 2.6 OB/ 2.9 2.2 2.8 1.5 5.0 2.7 3.4 2.3 2.9 2.4 2.2 FY13E FY14E Sales(x)

33 Neutral

55.5 106.0

1,515 1,788

43 Neutral 168 251 59 Buy Buy Buy

- Neutral 10,557

Source: Company, Angel Research

Exhibit 14: SOTP break-up

Company ABL CCCL IRB Infra ITNL IVRCL JP Assoc. L&T NCC Punj Lloyd Sadbhav Simplex In. Unity Infra Core Const. ` 86 16 52 74 17 27 1,351 25 64 70 251 52 % to TP 32 100 32 33 46 27 76 57 100 41 100 88 ` 30 Real Estate % to TP 30 ` 182 113 121 7 99 7 Road BOT % to TP 68 69 54 16 59 12 Invst. In Subsidiaries ` 4 20 437 % to TP 3 54 24 ` 30 43 12 Others % to TP 13 43 27 Total ` 268 16 164 225 37 100 1,788 44 64 168 251 59

Source: Company, Angel Research

February 6, 2013

3QFY2013 Result Update | India Research

Profit & loss statement (Consolidated)

Y/E March (` cr) Net Sales Other operating income Total operating income % chg Total Expenditure R.M. consumed Construction expenses Employee expenses SG&A EBITDA % chg (% of Net Sales) Depreciation & Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of earnings of asso. Less: Minority interest (MI) Prior period items PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 992 992 35.4 553 305 163 42 42 439 6.5 44.2 114 324 4.6 32.7 148 39 18.0 215 29.1 215 37.8 17.6 177 1.3 176 176 53.4 17.7 5.3 5.3 53.4 1,705 1,705 71.9 906 450 335 71 50 799 82.1 46.9 182 617 90.2 36.2 251 51 12.2 417 93.8 417 13.3 3.2 403 17.9 385 385 119.2 22.6 11.6 11.6 119.2 2,438 2,438 43.0 1,350 413 769 93 76 1,088 36.2 44.6 225 863 39.8 35.4 352 64 11.2 576 38.2 576 111.7 19.4 464 11.7 452 452 17.4 18.6 13.6 13.6 17.4 3,133 3,133 28.5 1,764 639 886 138 101 1,369 25.8 43.7 297 1,072 24.3 34.2 546 125 19.2 651 13.1 651 155.2 23.8 496 0.0 496 496 9.6 15.8 14.9 14.9 9.6 3,843 3,843 22.7 2,164 711 1,172 161 119 1,679 22.6 43.7 447 1,232 14.9 32.1 616 134 17.9 751 15.3 751 187.7 25.0 523 0.0 563 563 13.5 14.7 16.9 16.9 13.5 4,212 4,212 9.6 2,375 779 1,301 168 126 1,836 9.4 43.6 534 1,302 5.7 30.9 659 147 18.6 791 5.3 791 197.6 25.0 563 0.0 593 593 5.3 14.1 17.8 17.8 5.3

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3QFY2013 Result Update | India Research

Balance sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves & Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 2,460 444 2,016 1,455 111 1,018 415 385 218 306 712 1 4,294 4,019 551 3,467 880 45 1,148 510 438 199 482 666 1 5,060 4,132 769 3,362 2,507 55 2,055 1,200 600 255 810 1,245 7,170 6,620 1,065 5,554 2,445 14 2,845 1,821 778 246 791 2,054 10,067 9,126 1,512 7,614 3,587 24 2,721 1,355 1,031 335 1,064 1,657 12,882 11,868 2,046 9,822 4,026 34 2,282 719 1,202 361 1,136 1,145 15,027 332 1,398 1,730 60 2,486 18 4,294 332 1,708 2,040 78 2,915 27 5,060 332 2,100 2,433 90 4,624 23 7,170 332 2,524 2,857 112 7,072 26 10,067 332 2,940 3,272 112 9,472 26 12,882 332 3,385 3,717 112 11,172 26 15,027 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

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3QFY2013 Result Update | India Research

Cash flow statement (Consolidated)

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/ Dec. in Fixed Assets (Inc.)/ Dec. in Investments Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 215 110 (120) (39) (38) 128 (807) 88 39 (681) (0) 465 (65) 45 445 (107) 522 415 417 107 141 (51) (13) 601 (984) 66 51 (867) 429 (76) 9 362 95 415 510 576 218 111 (64) (112) 729 (1,740) (10) 64 (1,686) 0 1,709 (60) (3) 1,647 690 510 1,200 651 295 (188) (125) (155) 478 (2,425) 41 125 (2,259) (0) 2,448 (72) 25 2,401 621 1,200 1,821 751 447 (69) (134) (188) 807 (3,650) (10) 134 (3,525) 2,400 (148) 2,252 (466) 1,821 1,355 791 534 (125) (147) (198) 855 (3,180) (10) 147 (3,043) 1,700 (148) 1,552 (636) 1,355 719

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3QFY2013 Result Update | India Research

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 1.2 4.7 2.2 1.2 3.0 2.5 1.4 3.1 2.5 1.8 3.8 2.0 2.5 4.8 2.0 2.8 5.7 2.0 0.4 47 5 87 191 0.5 40 5 62 133 0.6 25 5 125 112 0.6 19 3 168 109 0.5 19 2 153 113 0.4 21 2 151 127 8.1 13.8 10.5 13.2 20.3 20.4 14.1 24.2 20.2 12.4 23.2 18.8 10.7 17.9 18.4 9.3 14.3 17.0 32.7 82.4 0.3 7.6 5.4 1.1 9.9 36.2 96.8 0.4 14.2 9.0 1.2 20.3 35.4 80.6 0.5 13.2 7.5 1.3 20.6 34.2 76.2 0.4 11.5 7.1 1.6 18.6 32.1 75.0 0.4 9.3 5.6 2.2 17.5 30.9 75.0 0.3 7.6 4.8 2.6 14.9 5.3 5.3 8.7 1.7 52.1 11.6 11.6 17.1 1.9 61.4 13.6 13.6 20.4 1.5 73.2 14.9 14.9 23.9 1.8 85.9 16.9 16.9 30.4 3.7 98.4 17.8 17.8 33.9 3.7 111.8 23.5 14.2 2.4 1.3 6.3 14.1 1.4 10.7 7.3 2.0 1.6 3.8 8.2 1.3 9.1 6.1 1.7 1.2 3.1 6.9 1.1 8.3 5.2 1.4 1.4 3.0 6.9 0.9 7.3 4.1 1.3 3.0 3.2 7.3 1.0 7.0 3.7 1.1 3.0 3.5 7.9 1.0 FY2009 FY2010 FY2011 FY2012E FY2013E FY2014E

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3QFY2013 Result Update | India Research

Research Team Tel: 022 - 39357800

E-mail: [email protected]

Website: www.angelbroking.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 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

IRB Infra No No No No

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

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

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