Small cap stock down 7% from high. There is a buying opportunity in Kotak Securities

 

• Kotak Securities has upgraded its IRB Infra share price target from ₹310 to ₹340 level

Small-cap stock IRB Infra has been in base building mode since climbing to its record high of ₹302.90 per share in Feb 2022. 100 cents away from its lifetime high and Kotak Securities sees major reversal in the infra stock, expecting it to climb to new highs in the coming sessions. According to the latest research report by Kotak Securities, IRB Infra shares can go up to ₹340 level from the current price of ₹280, giving a return of over 20 per cent to its shareholders.

In fact, Kotak Securities had earlier given a target of ₹310 per share on the infra stock but has now upgraded its target to ₹340 per share.

Due to the bullish momentum on this small-cap infra stock, a Kotak Securities report said, "Traffic levels in key stretches of IRB are holding up quite well. The EPC branch outperforms peers on strong order book despite weak inflows." NHAI. We expect the consolidated debt on loan repayments and new projects being taken up under private InVIT to come down from the current level. We revise our estimates to reflect better toll collections in the projects We do.

On the healthy improvement in toll collections for the projects, the brokerage said, "Toll collections for IRB's flagship project Mumbai-Pune Expressway and Ahmedabad-Vadodara Expressway have been on an upward trend since April 2022. A part of the increase is also driven by the low base Covid-affected year in FY21. Traffic volume improvement in 8MFY23 gives full gain of 21% YoY for Mumbai-Pune Expressway. Traffic improvement for 8MFY23 for Ahmedabad-Vadodara Expressway nearly 15% YoY for 8MFY23 10% increase in the adjusted toll rate. We revise our toll collection estimates for these projects to bake in better collections in 8MFY23.

"We revise down EBITDA projections for FY2024/25E by 4%/8% to better soak in toll revenue. We also incorporate better valuations of private InVIT projects in SoTP, valuations on which GIC has staked in FY2020 The Kotak Securities report states that private InvIT projects are valued in terms of completion of construction of the projects, improvement in traffic volume and revision in toll rates.

The brokerage report today concluded recommending a buy on the stock, "Our revised SOTP-based fair value of Rs 340 (Rs 310 earlier) also bakes into our valuation of Private InvIT projects versus the valuation taken at the time of the GIC deal." Keep it." ,