Buy KNR Constructions, target price Rs 226: Kotak Securities

Kotak Securities has maintained buy rating on KNR Constructions and cut target price to Rs 226 from Rs 333. The stock ended down 0.15 per cent at Rs 196.10 on Wednesday while the BSE Sensex closed 1203.18 points down (-4.08 per cent) at 28,265.31.

KNR Constructions, incorporated in 1995, has a market cap of Rs 2757.51 crore.

Investment Rationale


The current lockdown is expected to negatively impact earnings in the near to medium term, said Kotak Securities. The brokerage has assumed order inflows of Rs 1,500 crore for FY20 against Rs 2,500 crore earlier and assumed order inflows of Rs 2,000 crore against Rs 3,000 crore estimated earlier.

Financials

KNR Constructions' key products/revenue segments include Income From Contracts which contributed Rs 2102.89 crore to sales value (98.39 per cent of total sales) and Other Operating Revenue which contributed Rs 34.36 crore to sales value (1.60 per cent of total sales) for the year ending March 31, 2019.

For the quarter ended December 31, 2019, the company reported consolidated sales of Rs 603.75 crore, up 2.84 per cent from last quarter sales of Rs 587.07 crore and up 24.78 per cent from last year same quarter sales of Rs 483.85 crore. The company reported net profit after tax of Rs 49.96 crore in the latest quarter.