Q1 Results: GIC Deal Opens Up Phenomenal Traffic Potential, Says IRB Infra
The GIC deal should come as a boost to IRB Infra as its Q1 results were hurt by low toll growth due to pending highway projects.
IRB Infrastructure Developers Ltd.'s said sluggish toll growth due to pending highway construction projects impacted its June quarter results, Chairman and Managing Director Virendra D Mhaiskar told BloombergQuint on Wednesday.
IRB Infra’s profit fell 17.4 percent year-on-year to Rs 206.6 crore in the June quarter, even as revenue rose 15.3 percent to Rs 1,773 crore.
Both the metrics missed analysts’ expectations.
Mhaiskar expects traffic to increase and toll revenue growth to pick up with the completion of these highway projects in the future.
GIC Deal
Mhaiskar sees IRB Infra’s stake sale deal with the Government of Singapore Investment Corp. to reduce the company’s debt by Rs 3,000 crore. The IRB Infra-GIC deal is one of the “largest toll growth deal”, with an enterprise value of Rs 22,500 crore.
On Tuesday, IRB Infra said it will sell stake in its road business to GIC for Rs 4,400 crore. The company will transfer nine of its build-operate-transfer assets into a private infrastructure investment trust, in which IRB Infra will hold 51 percent stake.
IRB Infra Q1 Results 2019-20: Key Highlights (YoY)
- Ebitda rises 14.6 percent to Rs 855.3 crore.
- Margin contracts by 30 basis points to 48.2 percent.
- Finance cost jumps 46 percent at Rs 362.2 crore.
Watch the full interview here: