IRB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | IRB | Market Cap | 26,573 Cr. | Current Price | 22.0 ₹ | High / Low | 27.2 ₹ |
| Stock P/E | 26.4 | Book Value | 13.2 ₹ | Dividend Yield | 0.70 % | ROCE | 7.31 % |
| ROE | 6.55 % | Face Value | 1.00 ₹ | DMA 50 | 21.2 ₹ | DMA 200 | 21.8 ₹ |
| Chg in FII Hold | 0.52 % | Chg in DII Hold | 0.05 % | PAT Qtr | 390 Cr. | PAT Prev Qtr | 287 Cr. |
| RSI | 57.1 | MACD | 0.01 | Volume | 4,79,29,128 | Avg Vol 1Wk | 11,40,20,346 |
| Low price | 18.5 ₹ | High price | 27.2 ₹ | PEG Ratio | 0.67 | Debt to equity | 0.74 |
| 52w Index | 40.6 % | Qtr Profit Var | 40.0 % | EPS | 0.83 ₹ | Industry PE | 17.5 |
📊 Financials: IRB Infrastructure reports quarterly PAT of ₹390 Cr, up from ₹287 Cr, showing strong earnings growth (+40%). ROE at 6.55% and ROCE at 7.31% are modest, reflecting limited efficiency. Debt-to-equity ratio of 0.74 is manageable, indicating moderate leverage. EPS of ₹0.83 is low relative to market cap, highlighting weak per-share profitability.
💹 Valuation: P/E ratio of 26.4 is above industry average (17.5), suggesting premium valuation. Book value of ₹13.2 vs current price ₹22 shows the stock trades at a premium. PEG ratio of 0.67 indicates growth prospects are reasonably priced. Dividend yield of 0.70% provides limited income support.
🏦 Business Model: IRB operates as a leading infrastructure developer, focusing on road construction and toll operations. Its competitive advantage lies in strong project pipeline and government contracts. However, profitability remains constrained by high capital intensity and modest return metrics.
📈 Entry Zone: Attractive entry near ₹19–21, closer to support levels. Current price reflects moderate overvaluation. Long-term holding is viable if earnings growth sustains and efficiency improves.
Positive
- ✅ Strong quarterly PAT growth (+40%).
- ✅ Moderate debt-to-equity ratio (0.74) compared to peers.
- ✅ FII holdings increased (+0.52%), showing foreign investor confidence.
Limitation
- ⚠️ ROE (6.55%) and ROCE (7.31%) reflect weak efficiency.
- ⚠️ EPS of ₹0.83 is low relative to valuation.
- ⚠️ P/E ratio (26.4) above industry average (17.5) suggests overvaluation.
Company Negative News
- 📉 Low per-share profitability despite rising PAT.
- 📉 Valuation risk due to premium pricing.
Company Positive News
- 📈 Strong earnings momentum with 40% profit growth.
- 📈 Increased institutional confidence (FII +0.52%, DII +0.05%).
Industry
- 🏗️ Infrastructure sector trades at average P/E of 17.5, lower than IRB’s valuation.
- 🏗️ Government push for road and highway projects supports demand.
- 🏗️ Sector faces challenges from capital intensity and regulatory delays.
Conclusion
🔎 IRB Infrastructure shows strong profit growth and moderate leverage, but weak efficiency metrics and premium valuation limit upside. Entry near ₹19–21 offers better risk-reward balance. Long-term holding is suitable if earnings momentum continues and return ratios improve.
Would you like me to also compare IRB’s fundamentals with NHAI or GMR Infrastructure to highlight differences in efficiency and valuation across the infrastructure sector?