IRB InvIT Fund (IRBINVIT) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, welcome to the IRB InvIT call hosted by the company for discussing the financial results for the quarter ended September 2026. We have with us on the call today, Mr. Anil Yadav, Mr. Rushabh Gandhi, and Ms. Swapna Vengurlekar from IRB InvIT team. As a reminder, all participant lines will be in the listen-only mode, and after the opening remarks by the management, there will be a question and answer session. Please note that duration of the call would be 45 minutes, and any queries left unanswered after the call can be subsequently mailed to the management for the adequate response and resolution. Please note that this conference is being recorded. I now request Mr. Rushabh to give you an overview of the significant developments during the quarter. Thank you, and over to you, sir.
Rushabh Gandhi (IRB InvIT Fund): Good evening, everyone, and welcome to all the investors and analysts joining us today on the call. I trust you have had a chance to review our financial results and the investor presentation. During the quarter, we acquired two operational BOT road assets from IRB Infrastructure Trust, Solapur-Yedeshi, which is located in the state of Maharashtra, and Chittorgarh-Gulabpura project, which is situated in the state of Rajasthan. Together, they have been acquired at an enterprise value of around 4,600 crores. And the acquisition was effective from 30th of September 2026. With this addition, the Trust portfolio now has 11 operational road assets, which includes nine BOT and two HAM assets, covering 5,314 lane kilometers. The portfolio of the Trust has an enterprise value of around 23,000 crores. The weighted average residual concession life is around 17 years, which gives a strong, long-term visibility of cash flows. These acquisitions were funded through a mix of equity and debt. On the equity side, the Trust raised 2,351 crores of unit capital during the quarter, which included an institutional placement of around 2,000 crores at a price of 63 per unit and preferential issue of 351 crores at a price of 65 per unit towards sponsors, IRB Infrastructure Developers Limited. This has allowed the sponsor to maintain its holding at around 16%. The institutional placement drew a strong, broad-based response from domestic as well as global investors, including pension funds, insurance, mutual funds, and family offices. We thank all our investors for their continued confidence in the Trust. The balance was funded through debt at an interest rate of 7.5% per annum. Coming to the toll revenue performance, for the quarter ended 30th September 2026, the gross toll revenue was 417 crores as compared to 394 crores in the corresponding quarter of previous year. That is a growth of 5.8%. For a like-for-like comparison, we have excluded MDR project since the project was handed over to the authorities on 1st of September 2026. At the asset level, Y-o-Y growth for the quarter was: Pathankot-Amritsar project, 13.2%; Talegaon-Amravati project, 9.8%; Tumkur-Chitradurga project, 9.2%; Jaipur-Deoli project, 8.6%; and Kaithal-Rajasthan project, 5.8%. The growth was moderated by two factors. The first was on the softer traffic on two of our projects, which was linked to the ongoing geopolitical issue situation. And second is the seasonality, since the second quarter is a monsoon quarter and typically weak period for traffic. We expect the traffic on this project to normalize over the coming quarters. Coming to the RBI rate hike and the interest outlook, our toll rates are revised annually and linked to WPI inflation. WPI was relatively subdued over the last couple of years. With the current geopolitical pressures, WPI is now trending at around 9%. That should feed into future toll rate revision and give the portfolio a natural hedge against the rising costs. On the interest rate, more than 30% of our debt is fixed in nature and balance is floating. Taking these factors together, we do not currently expect the rate environment to have a material impact on the financial position of the Trust. On the distribution side, with the expanded capital base, the Trust has declared a distribution of Rs. 268 crores, translating to 1.625 per unit. The distribution comprises of 1.475 per unit in the form of interest and 0.15 per unit in the form of return of capital. Since Solapur-Yedeshi and Chittorgarh-Gulabpura project were acquired on 30th of September 2026, they are expected to contribute to NDPF
Rushabh Gandhi (IRB InvIT Fund): on the credit profile, the trust continue to maintain a strong credit profile with its triple rating maintained by India Ratings and CARE Ratings. The recent the recent debt was raised at 7.5% per annum, reflecting the trust's strong access to the capital market. Coming to the financial performance. I'll walk you through the financial numbers for the current quarter as compared to the corresponding quarter of previous year. During the third quarter of previous year, three BOT and in the fourth quarter one HAM asset was added to the portfolio. Accordingly, the YoY numbers are not strictly comparable. The total consolidated income for the current quarter stood at 514 crore as compared to 278 crore for the corresponding quarter of previous year. The consolidated toll revenue for the current quarter stood at 377 crore as against 242 crore in the corresponding quarter of previous year. EBITDA stood at 359 crore in the current quarter as against 233 crore in the corresponding quarter of previous year. Interest cost, which includes the interest on deferred premium, for the current quarter stood at 208 crore as against 73 crore in the corresponding quarter of previous year. Depreciation, which includes amortization, for the current quarter stood at 116 crore as against 72 crore in the corresponding quarter of previous year. Profit after tax stood at 26 crore as against 83 crore in the corresponding quarter of previous year. With this, I will now open the floor for questions and answers. Over to the moderator.
Moderator: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sarvesh Gupta with Maximal Capital Private Limited. Please go ahead.
Sarvesh Gupta (Maximal Capital Private Limited): Good evening, sir, and congratulations on a good set. So, sir, first question is on the interest rate hike side. So, you will be getting, I think, 40% of this WPI hike on the on on your revenue line. And at the same time you have 70% of your debt as floating. So, what is the net impact that you will get on the P&L, and what would be the impact on your NAV calculations, if you can throw some light on that? Thank you.
Rushabh Gandhi (IRB InvIT Fund): Sure, sir. So on the revenue side, so as you're aware that the WPI of the December month will be critical for us, which will be considered for the revenue growth for next year, the tariff revision. And considering the current situation, we believe that should be on the higher side. And correspondingly for interest cost, 30% is fixed and balance 70% major party is linked to MCLR. So, currently we have not seen any increase on that part, but typically what we see that MCLR increases normally lag by a couple of quarters. So, the impact ideally would we see after March, but looking at the net impact, we do not foresee any material impact on the distribution part.
Anil Yadav (IRB InvIT Fund): Yeah. So, as you heard earlier in the commentary itself, that we are expecting at least the inflation number is 9% today, so 40% of the same comes around so 3.6 or 4, and then 3% is fixed. So, roughly 8% is the expected inflation rate, and assuming that is there for the next year and the interest cost hike what we are talking on the floating, which will also be very slowly and gradually linked to MCLR. So, we don't foresee any impact of any interest hike in the coming quarters the due to this inflation hike whatever will be getting in the coming quarters from the next year.
Rushabh Gandhi (IRB InvIT Fund): Yes, our revenues are far higher than the debt that we have. So, the revenues will increase by around almost 8% or because of the tariff increase, whereas the impact on the debt the cost of debt increase would be on a relatively smaller base. So, net-net, it's not going to be negative to us.
Sarvesh Gupta (Maximal Capital Private Limited): Understood. And in on the NAV side, so what would be your sensitivity broadly on your NAV calculations for every 50 basis points, let's say increase in the interest rate?
Anil Yadav (IRB InvIT Fund): So, present NAV if the NAV what you see today is at 75 odd, and what we have already what we have observed in last couple of years due to higher inflationary si
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