Motilal Oswal’s analysis report on KNR Constructions
In 3QFY24, KNRC didn’t safe any main orders. As of Dec’23, the order ebook stands at ~INR66b (contemplating order inflows submit 2QFY24 and anticipated execution in 3QFY24). KNRC is anticipating INR20-30b in new undertaking wins in FY24 (earlier steering of INR40-50b) as order inflows could also be slower than initially anticipated as a consequence of upcoming elections. KNRC is exploring alternatives in numerous states for undertaking bidding and can also be contemplating selective bidding throughout infrastructure verticals. The corporate expects enhancements in undertaking execution inside the irrigation order ebook within the coming months. Regardless of going through challenges within the execution of irrigation tasks, KNRC foresees a possible enchancment in undertaking execution within the upcoming months. Administration is anticipating improved execution in 2HFY24, pushed by the Street section. KNRC is focusing on to clock a income of INR40b in FY24E with margins within the vary of 18-19%. The order inflows have been weak thus far in FY24; nonetheless, the tender pipeline stays strong and KNRC expects some order inflows to materialize quickly. In keeping with muted awarding exercise by NHAI in YTDFY24, KNRC has diminished its order influx steering for FY24 to INR20-30b. With the prevailing order ebook of ~INR66b, we anticipate a ten% income CAGR over FY23-26.
EBITDA margin is anticipated to be ~18-19%. We reiterate our BUY score with a TP of INR325 (SoTP-based valuation). We worth the EPC enterprise at P/E of 14x on FY26E EPS and BOT belongings at 1x Funding worth.
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KNR Constructions – 24012024 – moti