HDFC Securities has given Buy recommendation for J. Kumar Infraprojects with a target price of Rs. 220 in its research report issued on Feb 11, 2021

HDFC Securities’ research report on J. Kumar Infraprojects

J Kumar (JKIL) reported revenue/EBITDA/PAT at Rs 8.1/1.2/0.45bn, beating our estimate by 21/7/12% on better-than-expected execution recovery. However, the company disappointed on margin (14.2% vs 16% est.). YTD order inflow stood at Rs 21bn. While the order backlog is robust at 3.7x FY20 revenue, near-term execution challenges have alleviated now to a large extent.

Outlook

At 5.6x FY23E EPS, valuations are compelling. We maintain BUY on JKIL with an increased target price of Rs 220/sh (7x Dec-22E EPS) and revise FY21/FY22/FY23 EPS est. by 5.5x/5%/7% to account for execution recovery.

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