IRB - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.8

📊 Core Financials:

- Quarterly PAT at ₹188 Cr vs ₹140 Cr previously → healthy growth (17.8% variation).

- ROCE at 7.21% and ROE at 8.13% → modest efficiency.

- Debt-to-equity ratio at 0.78 → moderate leverage, manageable for infrastructure sector.

- Dividend yield at 0.74% → provides some shareholder returns.

💹 Valuation Indicators:

- Current P/E: 27.5 vs Industry P/E: 18.8 → trading at a premium.

- P/B ratio: ~1.63 (₹41.1 / ₹25.2) → reasonable.

- PEG ratio: 0.60 → attractive, suggests undervaluation relative to growth.

- Intrinsic value appears higher than CMP, indicating potential undervaluation despite premium P/E.

🏢 Business Model & Competitive Advantage:

- IRB Infrastructure Developers operates in road construction and toll management.

- Competitive advantage lies in strong project portfolio, government contracts, and established presence in highways sector.

- Market cap of ₹24,802 Cr reflects significant role in infrastructure development.

📈 Entry Zone & Long-Term Guidance:

- CMP ₹41.1 is below DMA 50 (₹42.9) and DMA 200 (₹46.0), showing short-term weakness.

- RSI at 34.0 and MACD negative → oversold zone, accumulation opportunity.

- Suggested entry zone: ₹39–₹41.

- Long-term holding recommended for investors seeking exposure to infrastructure growth, though efficiency ratios remain modest.

Positive

• Quarterly PAT growth of 17.8% (₹140 Cr → ₹188 Cr).
• PEG ratio of 0.60 indicates undervaluation relative to growth.
• Reasonable P/B ratio (~1.63).
• Dividend yield of 0.74% provides shareholder returns.

Limitation

• P/E (27.5) higher than industry average (18.8).
• ROCE (7.21%) and ROE (8.13%) are modest.
• Stock trading below DMA levels, showing weakness.

Company Negative News

• FII holdings reduced by -0.21%.
• DII holdings reduced by -0.63%.

Company Positive News

• Quarterly PAT improved from ₹140 Cr to ₹188 Cr.
• EPS of ₹9.34 supports earnings visibility.

Industry

• Infrastructure sector is growing with government focus on highways and public projects.
• Industry P/E at 18.8 indicates moderate valuation compared to IRB’s premium pricing.

Conclusion

⚖️ IRB Infrastructure shows steady profit growth and reasonable valuation metrics, supported by a strong project portfolio. While efficiency ratios are modest and stock trades at a premium P/E, PEG suggests growth potential. Entry is favorable around ₹39–₹41 for long-term investors, with upside linked to infrastructure expansion in India.