Buy KNR Constructions, target price Rs 374: HDFC Securities
HDFC Securities maintains a 'buy' rating for KNR Constructions, setting a target price of Rs 374. Despite missing some financial estimates, the company reported strong Q2 earnings and provided a positive revenue outlook for FY25. KNR Constructions...
By ETMarkets.com |
ANI
HDFC Securities has buy a call on KNR Constructions with a target price of Rs 374. The current market price of KNR Constructions is Rs 302.1. KNR Constructions, incorporated in 1995, is a Mid Cap company with a market cap of Rs 8505.94 crore, operating in the Infrastructure sector.
KNR Constructions' key products/revenue segments include Income From Contracts and Other Operating Revenue for the year ending 31-Mar-2024.
Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 2,092.06 crore, up 107.98% from last quarter Total Income of Rs 1,005.90 crore and up 100.43% from last year same quarter Total Income of Rs 1043.79 Crore. Company has reported net profit after tax of Rs 585.06 crore in the latest quarter.
Investment Rationale
KNR reported revenue/EBITDA/APAT at Rs 8.6/1.4/0.9 billion, adjusted for one-off in order to arrive at comparable numbers, (miss)/beat on our estimates by7.7%/ 4.4%/16.7%. EBITDA margin came in at 16.1% (-154/-43bps YoY/QoQ vs the brokerage estimate of 16.6%). KNR guided its FY25 revenue to be at Rs 35-36 billion, with an EBITDA margin of 15-16% and Order Inflow (OI) of Rs 60-80 billion for FY25. KNR has not secured any order inflow in H1FY25, with Q4FY25 to have significant OI as per management's expectations. Revenue guidance is on the back of weak ordering start and lower starting order book. Given the aggressive competition, the company continues to aspire for projects from different segments like irrigation projects from states other than Telangana.
On the HAM portfolio, KNR has already invested INR 5.1bn; the balance equity requirement in NHAI HAM projects is Rs 4.36 billion as of Sep?24, of which Rs 2/1.2/1.1 billion will be infused in H2FY25/26/27. KNR highlighted NHAI bid pipeline of Rs 2 trillion and expects to win Rs 50/20 billion of orders from NHAI HAM/BOT. Beyond NHAI, it is looking to take Rs 20 billion MSRDC subcontract and INR 40bn is state order pipeline.
Promoter/FII Holdings
Promoters held 48.81 per cent stake in the company as of 30-Sep-2024, while FIIs owned 6.65 per cent, DIIs 30.47 per cent.
KNR Constructions' key products/revenue segments include Income From Contracts and Other Operating Revenue for the year ending 31-Mar-2024.
Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 2,092.06 crore, up 107.98% from last quarter Total Income of Rs 1,005.90 crore and up 100.43% from last year same quarter Total Income of Rs 1043.79 Crore. Company has reported net profit after tax of Rs 585.06 crore in the latest quarter.
Investment Rationale
KNR reported revenue/EBITDA/APAT at Rs 8.6/1.4/0.9 billion, adjusted for one-off in order to arrive at comparable numbers, (miss)/beat on our estimates by7.7%/ 4.4%/16.7%. EBITDA margin came in at 16.1% (-154/-43bps YoY/QoQ vs the brokerage estimate of 16.6%). KNR guided its FY25 revenue to be at Rs 35-36 billion, with an EBITDA margin of 15-16% and Order Inflow (OI) of Rs 60-80 billion for FY25. KNR has not secured any order inflow in H1FY25, with Q4FY25 to have significant OI as per management's expectations. Revenue guidance is on the back of weak ordering start and lower starting order book. Given the aggressive competition, the company continues to aspire for projects from different segments like irrigation projects from states other than Telangana.
On the HAM portfolio, KNR has already invested INR 5.1bn; the balance equity requirement in NHAI HAM projects is Rs 4.36 billion as of Sep?24, of which Rs 2/1.2/1.1 billion will be infused in H2FY25/26/27. KNR highlighted NHAI bid pipeline of Rs 2 trillion and expects to win Rs 50/20 billion of orders from NHAI HAM/BOT. Beyond NHAI, it is looking to take Rs 20 billion MSRDC subcontract and INR 40bn is state order pipeline.
ADVERTISEMENT
Given a strong balance sheet and likely new order wins on the back on robust order pipeline in FY25, HDFC Securities maintains a BUY with a target price of Rs 374/share (15x Sep-26E EPS).Promoter/FII Holdings
Promoters held 48.81 per cent stake in the company as of 30-Sep-2024, while FIIs owned 6.65 per cent, DIIs 30.47 per cent.
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