InvITs are fairly new product and will pick up traction in future, believes Virendra Mhaiskar, CMD, IRB Infrastructure.
What has led to the growth this time around and what were the key highlights of Q4?
We have seen a steady growth in both the verticals which is construction as well as tolling and that has resulted in 14% growth on year-on-year basis on the top line and close to 12% growth on the profitability. And we see a steady EBITDA because of the business mix remaining more or less constant. So it has been a healthy quarter in terms of stable growth and going forward. As the demonetisation impact seems to be waning, we believe going forward also we should see steady growth on our toll assets.
Could you quantify then the amount of revenues that came in from traffic at toll growth?
Traffic has been growing in the range of around 6-7%. Inflation almost all through the last year has been flattish so the projects where we had a 3% fixed element has come through but the tariff revision on account of WPI was more or less flattish. In spite of that this growth has been registered so with inflation a bit of inching back we believe this year the revenue should remain more stronger than that.
Your margins for the quarter gone by as well have been pretty strong. Do you think the margins are sustainable at the current levels and would you say that there is also scope that you may actually be able to better that?
We operate in to verticals with is BOT and construction. In the BOT business, usually there is an 85% EBITDA margin whereas the construction margins are in the range of around 10% PAT levels. So depending on the project mix you would see the overall margins shaping up but as I said the product mix has remained more or less same; the margins have remained steady and going forward also considering the Rs 9000 crore odd of order book on hand we believe we will be able to maintain these margins.
Slightly disheartened that your InvIT got a strong subscription but it never got a good listing response?
It is a fairly new product and we have to remember that this is not an equity product. It is a yield product and as such once people start seeing the yields coming through it would instil more confidence into the investors. This is a new product and it would take some more time for people to understand how it operates. As the results on the InvITs will come out, it will see a very good pick up.
So when exactly do you think the first payout will happen?
See we have already stated in the past that as per the SEBI regulations the InvIT needs to give out a dividend at least twice in a year but as the assets that we have in the InvIT are all toll yielding assets we would be able to give it on a quarterly basis.