IRB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.2
| Stock Code | IRB | Market Cap | 26,016 Cr. | Current Price | 21.5 ₹ | High / Low | 27.2 ₹ |
| Stock P/E | 29.1 | Book Value | 12.6 ₹ | Dividend Yield | 0.70 % | ROCE | 7.21 % |
| ROE | 8.13 % | Face Value | 1.00 ₹ | DMA 50 | 21.3 ₹ | DMA 200 | 21.9 ₹ |
| Chg in FII Hold | 0.52 % | Chg in DII Hold | 0.05 % | PAT Qtr | 287 Cr. | PAT Prev Qtr | 188 Cr. |
| RSI | 50.6 | MACD | 0.22 | Volume | 1,16,69,075 | Avg Vol 1Wk | 1,10,35,437 |
| Low price | 18.5 ₹ | High price | 27.2 ₹ | PEG Ratio | 0.64 | Debt to equity | 0.78 |
| 52w Index | 35.0 % | Qtr Profit Var | -3.20 % | EPS | 0.73 ₹ | Industry PE | 18.5 |
Core Financials:
IRB shows modest fundamentals. ROE is 8.13% and ROCE 7.21%, reflecting weak efficiency. EPS is very low at ₹0.73, limiting valuation strength. Quarterly PAT improved (₹287 Cr vs ₹188 Cr), but profit variation remains negative (-3.20%). Debt-to-equity is reasonable at 0.78, indicating manageable leverage.
Valuation:
Stock P/E of 29.1 is significantly higher than industry average (18.5), suggesting overvaluation. PEG ratio of 0.64 indicates fair growth alignment. Price-to-book is ~1.7, moderately expensive. Dividend yield of 0.70% provides limited income support.
Business Model & Health:
IRB operates in road infrastructure and toll collection, benefiting from government projects and traffic growth. Competitive advantage lies in its established portfolio of highways. However, profitability metrics remain weak compared to peers, and valuation is stretched.
Entry Zone:
Ideal entry zone: ₹19–₹20. Current price ₹21.5 is slightly above fair entry. Long-term holding is viable only if earnings growth sustains and valuation moderates.
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Positive
- PAT improvement (₹287 Cr vs ₹188 Cr)
- Reasonable debt-to-equity (0.78)
- Dividend yield of 0.70%
- FII holdings increased (+0.52%)
Limitation
- High P/E (29.1) vs industry (18.5)
- Weak ROE (8.13%) and ROCE (7.21%)
- EPS very low at ₹0.73
- Profit variation remains negative (-3.20%)
Company Negative News
- Valuation concerns due to stretched P/E
- Earnings volatility undermines investor confidence
Company Positive News
- Quarterly PAT growth supports momentum
- FII confidence improved (+0.52%)
- Technicals show mild support: RSI 50.6, positive MACD (0.22)
Industry
Infrastructure sector trades at industry P/E of 18.5, supported by government spending and road expansion. Peer firms show stronger ROE and profitability, highlighting IRB’s relative weakness.
Conclusion
IRB is moderately overvalued with weak efficiency but improving earnings. Rating: 3.2. Entry near ₹19–₹20 is preferable. Long-term holding requires sustained profit growth and valuation moderation. Exit strategy around ₹26–₹27 if fundamentals stagnate.
Would you like me to also prepare a sector overlay HTML report comparing IRB with peers like IRCON and KNR Constructions, so you can benchmark efficiency and valuation side by side?