Double-digit toll revenue growth expected this fiscal: IRB Infrastructure
What's the story
IRB Infrastructure, a leading player in India's tolling sector, expects low double-digit growth in toll revenue for the ongoing fiscal year.
The forecast comes after a whopping 23% growth in FY24, mainly due to the addition of new assets.
Anil Yadav, Director of Investor Relations at IRB Infrastructure, disclosed this during an interview with CNBC-TV18.
Strategy
Core asset business remains the focus
Despite the slow pace of project awards, Yadav stressed that IRB Infrastructure continues to focus on its core asset business.
He disclosed that construction revenues only make up 15% of their overall mix.
The company has a strong pipeline with bids anticipated for both Toll-Operate-Transfer (TOT) and Build-Operate-Transfer (BOT) opportunities worth more than ₹1 lakh crore.
Performance
IRB Infrastructure's toll collection outpaces national average
In FY25, IRB Infrastructure and its private Infrastructure Investment Trust (InvIT) posted a combined 23% growth in toll collection. This is much higher than India's overall toll collection growth of 12.5%.
The company holds a whopping 10% market share in India's tolling business.
Yadav also mentioned they launched two projects under TOT in FY25, both of which have exceeded initial estimates.
Revenue
Traffic growth and tariff revision boost collections
Yadav emphasized that April's data shows healthy traffic growth coupled with a tariff revision from April 1.
The Palsit-Dankuni project, where IRB is widening from four to six lanes, is charging 75% of the full toll currently. After completion, it will charge 100% tariff plus 3% annual escalation.
The Ganga project is also nearing completion and should be operational in the second half of this financial year.
Business
Construction revenue dips, O&M revenue grows
Yadav admitted that construction revenues fell to around ₹1,200 crore due to lesser new awards.
However, he added that operations and maintenance (O&M) revenue, which makes up for about 20% of their business, continues to grow with good margins and provides a 20-year visibility.
He said that toll collection has been accounted as revenue since IRB's listing in 2008.
Future
Robust tendering pipeline for FY26
Giving an update on the tendering pipeline for FY26, Yadav said while awards have been slow, the pipeline is robust. He expects almost ₹60,000 crore of projects on TOT and ₹45,000-46,000 crore on BOT.