IRB Infra gains 9% in two days after rating upgrade

The stock moved higher by 5.5% to Rs 154 on Tuesday, extending its Monday's 3.3% gain on BSE, after the rating agency Ind- Ra revised the company's outlook to positive from stable.

Shares of IRB Infrastructure Developers have moved higher by 5.5% to Rs 154 on Tuesday, extending its Monday’s 3.3% gain on the BSE, after the rating agency India Ratings and Research (Ind- Ra) revised the company’s outlook to positive from stable, while affirming its long-term issuer rating at ‘IND A+’.

Thus far in the month of November, IRB Infra has outperformed the market by gaining 11%, after it reported 32% growth in net profit at Rs 1.73 billion in September quarter. Total income grew 20% at Rs 14.85 billion over the previous year quarter. In comparison, the S&P BSE Sensex was up 3% during the same period.

IRB Infra said the coming quarters will be more robust as the company will be commencing the construction activity on all three Hybrid annuity model (HAM) projects.

“All three HAM projects bagged, have successfully achieved financial closures at bid project cost despite a weak lending environment. Key projects have witnessed significant improvement in toll collection, which includes Kaithal-Rajasthan project and finally, with the construction also progressing well, even in monsoon quarter – we are set to fire on all engines,” Virendra Mhaiskar, chairman & managing director, IRB Infra said while announcing Q2 results.

“The positive outlook reflects an improvement in IRB Infra’s business profile supported by increased built, operate, transfer (BOT) revenue visibility, healthy growth in construction revenue on the back of strong order book, improvement in operating performance of operational projects and possible settlement of claim for Ahmedabad-Vadodara project, and continuous value unlocking through transfer of operational projects to Infrastructure Investment Trust (InvIT),” Ind-Ra said in a release. CLICK HERE TO READ FULL REPORT

The stock of IRB Infra recovered 29% from its 52-week low price of Rs 118 touched on October 26, 2018, on BSE in the intra-day trade. It had underperformed the market, with the market price of the company more than halved from its 52-week high level of Rs 286 on April 30.

At 02:08 PM, the stock was up 5% at Rs 153 on BSE, as compared to a 0.01% rise in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 4.03 million equity shares changed hands on the BSE and NSE so far.