Buy J Kumar Infraprojects, target price Rs 138: HDFC Securities

J Kumar Infraprojects Ltd., incorporated in the year 1999, is a Small Cap company (having a market cap of Rs 891.34 Crore) operating in Infrastructure sector.

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Promoters held 45.32 per cent stake in the company as of June 30, 2020, while FIIs held 8.19 per cent, DIIs 12.09 per cent and public and others 34.40 per cent.
HDFC Securities has given a buy rating to J Kumar Infraprojects with a target price of Rs 138. The share price moved up by 1.75 per cent from its previous close of Rs 117.05. The stock’s last traded price is Rs 119.10.
J Kumar Infraprojects Ltd., incorporated in the year 1999, is a Small Cap company (having a market cap of Rs 891.34 Crore) operating in Infrastructure sector.

Financials
For the quarter ended 30-06-2020, the company reported a Standalone sales of Rs 285.26 Crore, down 67.50 % from last quarter Sales of Rs 877.78 Crore and down 57.28 % from last year same quarter Sales of Rs 667.74 Crore. The Company reported net profit after tax of Rs -20.81 Crore in latest quarter.
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Investment Rationale
Whilst order backlog is robust at (4.2x 1-yr trailing revenue), near term execution challenges have sprung up as Metro/Tier-1 cities are the worst impacted due to COVID-19 in terms of labor migration. At 4.9x FY22E EPS, 1HFY21 losses/execution disappointment is already priced in. The brokerage maintains BUY. Key risks (1) Geographic concentration (2) Order conversion within estimated timelines (3) Prolonged monsoon.

Promoter/FII Holdings
Promoters held 45.32 per cent stake in the company as of June 30, 2020, while FIIs held 8.19 per cent, DIIs 12.09 per cent and public and others 34.40 per cent.
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