2QFY2013 Result Update | Infrastructure

October 30, 2012

IRB Infrastructure
Performance Highlights
Quarterly highlights - Consolidated
Y/E March (` cr) Net sales Op. profit Net profit 2QFY13 845 381 121 2QFY12 736 321 110 1QFY13 980 425 142 % chg (yoy) 14.9 18.4 9.9 % chg (qoq) (13.7) (10.5) (14.7)

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 9.5 11.0 1yr 12.0 (9.0) 62.7 4.1 22.9 10.4 3yr 11.8 (41.2) Infrastructure 3,983 6,200 1.4 210/100 1,049,192 10 18,793 5,717 IRBI.BO IRB@IN

`120 `164
12 Months

Source: Company, Angel Research

For 2QFY2013, IRB Infrastructure (IRB) reported a modest set of numbers. The companys revenue came slightly below our expectation, but owing to better-thanexpected performance at the EBITDAM level, earnings were higher than estimates. IRB is looking at both organic and inorganic options for growth with a threshold of 18% equity IRR and intends to allot 20% of consolidated cash flow post debt repayment towards acquisitions. In accordance with its strategy to declare ~20% of post-tax consolidated profit towards dividend, IRB declared an interim dividend of `1/share. Better-than-expected performance at the EBITDAM level: IRB reported a consolidated revenue growth of 14.9% yoy to `845cr against our estimate of `900cr. This uptick in revenue was mainly due to improved execution in under construction projects. E&C segments revenue grew by 17.8% yoy to `622cr and BOT segment witnessed a 7.7% growth to `257cr. On the EBITDAM front, IRBs margin came in at 45.0% a jump of 135bp on a yoy basis, higher than our estimate of 43.3%. Stable input prices led to an EBITDAM of 27.3% (excluding other income) for E&C segment. The interest cost came in at `148cr, registering a jump of 4.9% on a yoy basis. At the earnings front, IRB reported a growth of 9.9% to `121cr, above our estimate of `106cr on account of better-than-expected performance on the EBITDAM front and lower tax rate. Outlook and valuation: IRB has a robust order book of `7,466cr (2.9x 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 1HFY2013 IRB expects ordering activity to improve going ahead. The stock trades at FY2013 and FY2014 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)
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

FY2012 3,133 28.5 496 9.6 43.7 14.9 8.0 1.4 18.8 12.4 2.9 6.7

FY2013E 3,843 22.7 560 12.8 43.1 16.8 7.1 1.2 18.3 10.7 3.2 7.3

FY2014E 4,212 9.6 593 6.0 43.6 17.8 6.7 1.1 17.0 9.3 3.4 7.9

Viral Shah
022-39357800 Ext: 6842 viralk.shah@angelbroking.com

Please refer to important disclosures at the end of this report

2QFY2013 Result Update | India Research

Exhibit 1: 2QFY2013 performance (Consolidated)

Y/E March (` cr) Income from operations Total expenditure Operating profit OPM (%) Interest Depreciation Non operating income Nonrecurring items/Dividend 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

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

2QFY12 736 414 321 43.7 141 63 30 148 37 111 1 110 15.0 3.3

% chg(yoy) 14.9 12.1 18.4 135bp 4.9 76.1 10.1 5.2 7.0 (384.7) 9.9 (65)bp 9.9

1QFY13 980 554 425 43.4 154 109 32 195 56 140 (2) 142 14.5 4.3

% chg(qoq) (13.7) (16.2) (10.5) 161bp (3.9) 1.9 1.9 (20.6) (15.0) 5.5 (14.7) 17bp (14.7)

1HFY2013 1,825 1,019 806 44.2 302 219 66 351 92 258 (4) 263 14.4 7.9

1HFY2012 1,537 886 651 42.3 259 123 58 328 81 247 2 244 15.9 7.3

% chg(yoy) 18.7 15.0 23.9 183bp 16.8 78.2 12.5 7.0 13.9 4.7 7.6 (149)bp 7.6

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

2QFY13 622 257 878 187 227 414 30.1 88.2 47.1 60 88 148 14 97 111 113 42 155 77 44 121

2QFY12 528 238 766 140 212 352 26.5 88.8 45.9 32 109 141 14 49 63 94 54 148 66 45 110

% chg 17.8 7.7 14.7 33.9 7.1 17.7 361bp (57)bp 210bp 89.4 (19.9) 4.9 (2.2) 98.6 76.1 20.4 (21.5) 5.2 17.3 (0.9) 9.9

1QFY13 750 262 1,012 226 232 458 30.1 88.6 45.2 60 94 154 13 96 109 153 42 195 105 37 142

% chg (17.2) (1.9) (13.2) (17.1) (2.3) (9.6) 1bp (41)bp (170)bp 0.8 (6.9) (3.9) 8.2 1.1 1.9 (26.3) 0.2 (20.6) (26.6) 18.7 (14.7)

1HFY2013 1,372 519 1,891 413 458 872 30.1 88.4 46.1 121 181 302 26 193 219 266 84 351 182 81 263

1HFY2012 1,125 471 1,596 295 415 709 26.2 88.0 44.5 60 198 259 28 95 123 207 121 328 142 102 244

% chg 22.0 10.2 18.5 40.3 10.6 22.9 392bp 36bp (30)bp 99.4 (8.4) 16.8 (4.9) 102.3 78.2 29.0 (30.5) 7.0 27.7 (20.4) 7.6

October 30, 2012

2QFY2013 Result Update | India Research

Exhibit 3: 2QFY2013 Actual vs. Angel estimates

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

Estimates 900 391 150 144 38 106

Actual 845 381 148 155 37 121

Variation (%) (6.1) (2.5) (1.3) 7.8 (3.9) 14.1

Decent momentum at the revenue front continues

IRB reported a consolidated revenue growth of 14.9% yoy to `845cr against our estimate of `900cr. This uptick in revenue was mainly due to improved execution in under construction projects- Jaipur-Deoli, Talegaon-Amravati, PathankotAmritsar and Tumkur-Chitradurga BOT projects. E&C segments revenue grew by 17.8% yoy to `622cr and BOT segment witnessed a 7.7% growth to `257cr. Completion achieved by IRB on various under-construction projects is as following: Jaipur-Deoli 82%; Talegaon-Amravati 75%; Pathankot-Amritsar 61%; and Tumkur-Chitradurga 47%. Further IRB is looking to achieve completion for Jaipur Deoli and Talegaon Amravati in FY2013 while for Amritsar Pathankot the completion is expected to be achieved in June 2013.

Under-construction/development projects update

Kolhapur project: The state government appointed committee is likely to submit their reports validating the substantial completion of the projects post which, IRB would be able to start collecting toll. MVR infra: During the quarter, IRB has completed the process of acquisition of 74% stake in MVR Infrastructure and Tollways Pvt Ltd and thereby has become a subsidiary of the company. Acquisition of the remaining 26% stake would be completed once NHAI approves transfer of this stake to IRB. Ahmedabad Vadodara: IRB expects to receive appointed date for the AhmedabadVadodara project in the month of November, post which it would start the construction on the project and toll collection on the existing four lane expressway. Goa Kundapur: For the recently bagged Goa Kundapur project IRB is awaiting for LOA from NHAI. As there were only two bidders the bid has to go to the Board for approval.

October 30, 2012

2QFY2013 Result Update | India Research

Exhibit 4: Revenue grew by 14.9% yoy

1200.0 1000.0 800.0 600.0 400.0 668.8 767.0 801.3 735.9 200.0 0.0 3QFY11 1QFY12 3QFY12 1QFY13 Net Sales (` cr, LHS) Growth (yoy %, RHS) 11.5 745.5 10.6 848.0 979.8 22.3 14.9 845.3 54.4 52.9 56.5 50.1 60.0 50.0 40.0 30.0 20.0 10.0 -

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

800.0 700.0 600.0 500.0 400.0 300.0 466.5 214.0 578.4 211.5 597.2 232.4 527.5 238.5 525.8 253.5 624.6 256.6 750.5 261.8 621.5 256.9 200.0 100.0 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 E&C BOT

Source: Company, Angel Research

Source: Company, Angel Research

BOT toll revenue

In 2QFY2013 Surat-Dahisar, Mumbai-Pune and Bharuch-Surat BOT projects witnessed 14%, 9% and 4% growth in toll revenue on a yoy basis, respectively. Overall, on the toll collection front, IRB has achieved a yoy growth of 7% for 2QFY2013. During the quarter, Bharuch-Surat and Surat-Dahisar projects had a toll hike of 7.5% and 8.9%, effective from July 1, 2012, and September 1, 2012, respectively. Traffic growth in the Tumkur-Chitradurga project saw a decline on a qoq basis mainly due to ban in mining activity in Tumkur district, thus resulting in a decline in revenue growth of 4% qoq. 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
$

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

2QFY12 94 100 15 7 6 4 4 2 2 35 0 0 39 305

% chg 9.2 4.2 10.3 5.8 10.9 5.1 8.6 0.0 0.0 14.4 2.1 7.1

1QFY13 106 104 17 8 6 5 4 2 2 38 0 0 41 333

% chg(qoq) (3.7) 0.4 (7.0) (7.6) 8.9 (12.8) 5.6 (9.5) (20.8) 4.2 0.0 0.0 (4.4) (1.8)

1HFY2013 209 207 33 15 12 9 7 4 4 78 0 0 81 660

1HFY2012 188 198 30 14 11 8 7 4 4 68 0 0 50 583

% chg(yoy) 11.1 4.6 10.3 9.4 5.4 7.3 2.8 2.6 2.4 13.9 0.0 0.0 0.0 13.0

Kaman Paygaon BOT Project ** Khambatki Ghat BOT Project * Tumkur Chitradurga# 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

October 30, 2012

2QFY2013 Result Update | India Research

Higher-than-expected EBITDAM drives earnings growth

During the quarter, IRBs EBITDA margin came in at 45.0%, higher than our estimate of 43.3%. Stable input prices led to EBITDAM of 27.3% (excluding other income) for the E&C segment. Further management expects to maintain these margins going ahead as well, given input prices dont change a lot. On the BOT front, the company reported an EBITDAM of 88.2%, registering a decline of 57bp yoy. Depreciation came in at `111cr, in-line with our estimate. Interest cost came in at `148cr, registering a jump of 4.9% on a yoy basis. At the earnings front, IRB reported a growth of 9.9% to `121cr, above our estimate of `106cr on account of better-than-expected performance on the EBITDAM front and lower tax rate.

Exhibit 7: EBITDAM higher than industry average

450 400 350 300 250 200 150 100 294 315 329 321 342 381 425 381 50 3QFY11 1QFY12 EBITDA (Rs cr, LHS) 3QFY12 1QFY13 EBITDAM (%, RHS) 43.9 41.0 41.1 43.7 45.8 44.9 43.4 45.0 47.0 46.0 45.0 44.0 43.0 42.0 41.0 40.0 39.0 38.0

Exhibit 8: Better-than-expected show at the PAT level

160 140 120 100 80 60 40 133 103 134 110 131 120 142 20 0 3QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13 PAT (` cr, LHS) PATM (%, RHS) 121 10.0 5.0 19.9 13.4 16.7 15.0 17.6 14.2 14.5 14.3 25.0 20.0 15.0

Source: Company, Angel Research

Source: Company, Angel Research

October 30, 2012

2QFY2013 Result Update | India Research

Outlook and valuation

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

Exhibit 9: Change in estimates

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

FY2014E Variation (%) 0.6 1.9 12.4 Earlier Estimates 4,582 43.6 563 Revised Estimates 4,212 40.2 593 Variation (%) (8.1) (7.8) 5.3 3,843 43.1 559.6

Revised Estimates

3,821 42.3 498

IRB is looking at both organic and inorganic options for growth with a threshold of 18% equity IRR and intends to allot 20% of the consolidated cash flow post debt repayment towards acquisitions. 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 `7,466cr (2.9x 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 1HFY2013; IRB expects ordering activity to improve going ahead. As far as road EPC contracts are concerned IRB will take a call to bid or not once draft agreement is out. We have used sum-of-the-parts (SOTP) method to value the stock. We value the construction business at a P/E of 5x FY2014 earnings estimate 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 a Buy rating and target price of Rs164, indicating an upside of 37%.

October 30, 2012

2QFY2013 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 Multiple 3,43 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

October 30, 2012

2QFY2013 Result Update | India Research

Exhibit 12: Angel EPS forecast vs. consensus

Angel forecast FY2013E FY2014E
Source: Company, Angel Research

Bloomberg consensus 15.4 16.2

Variation (%) (1.6) 6.5

16.8 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: IRB achieved its yearly order inflow guidance by winning the Ahmedabad Vadodara project and is staying away from current competition. The order book of `7,466cr, excluding O&M orders (2.9x FY2013E E&C revenue), lends good revenue visibility for the next few years. Negligible dependence on capital markets: IRBs internal accruals/support (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.

October 30, 2012

2QFY2013 Result Update | India Research

Exhibit 13: Recommendation summary

Company ABL CCCL IRB Infra ITNL IVRCL JP Assoc. L&T Madhucon NCC Punj Lloyd Sadbhav Simplex In. CMP 222 13 120 183 40 86 32 42 49 143 201 TP 304 166 232 51 91 56 45 Rating FY12E Buy Buy Buy Buy Accu. Accu. Buy Accu. 1,495 2,048 3,133 5,606 4,971 12,853 53,171 1,802 5,250 - Neutral Top-line (` cr) FY13E 2,029 2,262 3,843 6,840 5,510 15,259 61,031 2,206 5,804 11,892 2,506 6,732 2,310 2,522 4,212 7,767 6,722 17,502 69,753 2,502 6,513 13,116 3,147 7,837 24.3 11.0 15.9 17.7 16.3 16.7 14.5 17.8 11.4 11.5 8.5 14.2 23.7 (0.5) 14.9 25.6 0.9 4.8 64.3 4.9 1.4 2.8 9.3 16.8 EPS (`) 27.1 1.5 16.8 24.4 2.5 4.2 66.1 4.6 3.0 1.7 7.5 23.4 31.7 2.7 17.8 28.3 4.6 5.0 76.5 4.7 3.5 3.1 10.4 29.4 15.7 9.3 5.3 125.5 1.9 9.1 (2.6) 58.0 5.7 5.7 32.2 9.4 8.0 7.1 44.3 17.9 25.5 6.5 29.9 17.6 15.4 11.9 P/E 8.2 8.6 7.1 7.5 15.8 20.3 24.8 7.0 13.8 28.7 19.1 8.6 7.0 4.8 6.7 6.5 8.7 17.2 21.4 6.9 12.0 15.8 13.7 6.8 OB/ 2.7 2.2 2.9 2.9 4.9 2.5 3.2 3.5 2.3 2.9 2.3 FY14E CAGR (%) FY12E FY13E FY14E CAGR (%) FY12E FY13E FY14E Sales(x)

1,638 1,748

- Neutral 10,557 182 Buy 2,676 265 Buy 6,010

Source: Company, Angel Research

Exhibit 14: SOTP break-up

Company ABL CCCL IRB Infra ITNL IVRCL JP Assoc. L&T Madhucon NCC Punj Lloyd Sadbhav Simplex In.

Core Const. ` 118 16 52 19 32 28 1,377 14 25 69 83 265 % to TP 39 100 32 8 63 31 79 25 54 100 46 100

Real Estate ` 30 2 2 % to TP 33 3 4 `

Road BOT % to TP 186 113 180 28 4 99 61 39 78 50 8 54 -

Invst. In Subsidiaries ` 4 19 371 % to TP 3 37 21 `

Others % to TP 33 33 12 15 14 36 21 34 -

Total ` 304 16 164 232 51 91 1,748 56 45 69 182 265

Source: Company, Angel Research

October 30, 2012

2QFY2013 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 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 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 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 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 31.9 616 134 18.0 746 14.6 746 186.5 25.0 523 0.0 560 560 12.8 14.6 16.8 16.8 12.8 30.9 659 147 18.6 791 6.0 791 197.6 25.0 563 0.0 593 593 6.0 14.1 17.8 17.8 6.0 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 992 992 35.4 553 305 163 42 42 439 6.5 44.2 114 324 1,705 1,705 71.9 906 450 335 71 50 799 82.1 46.9 182 617 2,438 2,438 43.0 1,350 413 769 93 76 1,088 36.2 44.6 225 863 3,133 3,133 28.5 1,764 639 886 138 101 1,369 25.8 43.7 297 1,072 3,843 3,843 22.7 2,187 711 1,191 161 123 1,656 21.0 43.1 429 1,227 4,212 4,212 9.6 2,375 779 1,301 168 126 1,836 10.9 43.6 534 1,302

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2QFY2013 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 1,494 7,633 3,587 24 2,701 1,333 1,030 338 1,066 1,635 12,879 11,868 2,028 9,841 4,026 34 2,260 697 1,202 361 1,136 1,124 15,024 332 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 2,936 3,268 112 9,472 26 12,879 332 3,381 3,713 112 11,172 26 15,024 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

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2QFY2013 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 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

FY2013E 746 429 (69) (134) (187) 785 (3,650) (10) 134 (3,525) 2,400 (148) 2,252 (488) 1,821 1,333

FY2014E 791 534 (125) (147) (198) 855 (3,180) (10) 147 (3,043) 1,700 (148) 1,552 (636) 1,333 697

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2QFY2013 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 (Rs) 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) Wcap 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 4.9 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 2 153 114 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 17.8 18.3 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 31.9 75.0 0.4 9.3 5.6 2.2 17.4 30.9 75.0 0.3 7.6 4.8 2.7 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 16.8 16.8 29.7 3.7 98.3 17.8 17.8 33.9 3.7 111.7 22.7 13.7 2.3 1.4 6.1 13.8 1.4 10.3 7.0 2.0 1.6 3.7 8.0 1.3 8.8 5.9 1.6 1.3 3.0 6.8 1.0 8.0 5.0 1.4 1.5 2.9 6.7 0.9 7.1 4.0 1.2 3.1 3.2 7.3 0.9 6.7 3.5 1.1 3.1 3.4 7.9 1.0 FY2009 FY2010 FY2011 FY2012E FY2013E FY2014E

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2QFY2013 Result Update | India Research

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

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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