IRB Infra shares can rise up to 71%, CLSA projects citing re-rating prospects

Shares of IRB Infrastructure Ltd. can rise as much as 71% from current levels, brokerage firm CLSA projected in a recent note on Friday, December 12.

CLSA maintained its "outperform" rating on the stock with a price target of ₹72, which implies a 71% upside from Thursday's closing levels.

IRB Infra's shares have corrected nearly 30% so far in 2025. CLSA's target is also the highest on the street for the stock.

CLSA wrote in its note that the key message from IRB Infra's third quarter tolling trends was that toll growth has improved 10% year-to-date, compared to 8% in the first quarter, despite early and excessive monsoons. Toll collections in November have risen 16% year-on-year.

Toll growth at its 100% owned Mumbai-Pune Expressway had more than doubled this financial year on a year-to-date basis, while tolls at its infrastructure trust (InvIT) assets increased by 11% during the same period.

The brokerage also wrote that its Infra Trust has transformed into a high yield, growth annuity, with the acquisition of three tollways, which will double its enterprise value.

Assets account for 89% of IRB Infra's price target, and therefore tolling will be the key driver of the company's growth, which will be aided by rising four-wheeler penetration and more commercial vehicles.

"The strategic stake sale by Cintra-GIC has raised growth and governance at IRB and is likely to support a re-rating of the stock before Earnings per Share becomes visible from growth capital," CLSA's note stated.

IRB Infra has won six assets after the injection of the strategic equity, of which the recent three could deliver mid-to-high-teen IRRs (Internal Rate Of Return), according to CLSA, which added that the government is planning a $30 billion pipeline of asset monetization, and IRB is well positioned among toll-road developers with its low-levered InvIT balance sheet.

Seven analysts have coverage on IRB Infra, out of which five have a "buy" rating and two have a "hold". The consensus estimate of price targets imply a potential upside of 34% from current levels.

Shares of IRB Infra are trading 0.3% higher on Friday at ₹41.91. The stock is down 3% in the last one month.