Shares of IRB Infrastructure have gone up over 12% in the past month, and analysts at Ventura see the stock going further up in the next two years.

The IRB Infrastructure Analyst: Ventura analysts reinitiated coverage on the stock with a “buy” rating and a price target of ₹94.5 in the next two years. The target reflects an around 170% upside from the stock’s last closing price of ₹35.

The IRB Infrastructure Thesis: The analysts noted that the company posted robust results for the September quarter with revenue growing at an impressive year-on-year (YoY) rate of 29.9%, reaching ₹1,745 crore. The company’s order book also expanded significantly, with a YoY growth of 62.7% to INR 32,666 crore.

The brokerage firm said that IRB’s future prospects also appear promising, with an expected CAGR (Compound Annual Growth Rate) of 13.9% for revenue, 11.5% for EBITDA, and 28.1% for net earnings over the period FY23-26. This is projected to lead to revenue, EBITDA, and net earnings reaching ₹9,456.7 crore, ₹4,485.7 crore, and ₹1,402.3 crore, respectively, by FY26.

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The industry outlook is also positive, with NHAI (National Highways Authority of India) planning to award ₹85,400 crore worth of priority category road projects in FY24, with ₹40,000 crore specifically allocated for BOT (Build-Operate-Transfer) road projects, where competitive intensity is lower, the brokerage said in its latest note.

The brokerage also highlighted three major projects that the construction company bagged. As per the firm these projects represent substantial growth opportunities for the company:

1. Hyderabad Outer Ring Road (ORR) TOT (Toll-Operate-Transfer) Project: This project is anticipated to contribute to IRB’s revenue and growth. IRB secured a significant 158 km Hyderabad ORR ToT (Toll-Operate-Transfer) project with an upfront payment of ₹7,380 crore in April 2023. This project is a revenue-linked asset that will be under IRB’s control for a concession period of 30 years.
2. Ganga Expressway BOT Project: The Ganga Expressway BOT project is a significant infrastructure development venture. Under the BOT model, IRB will be responsible for constructing, operating, and maintaining the expressway. This project is expected to generate revenue for the company in the coming years.
3. Samakhiyali Tollway BOT Project: The Samakhiyali Tollway BOT project is another key initiative that will contribute to IRB’s growth. Under the BOT model, IRB will manage the toll collection and maintenance of the road, ensuring a revenue stream for the company.

Price Action: IRB Infra’s share price was up 0.14% to trade at ₹35.05 in the morning hours of trading on Wednesday.

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