Motilal Oswal has given Buy recommendation for KNR Construction recommended buy rating on the stock with a target price of Rs 360 in its research rep with a target price of Rs. 360 in its research report issued on Nov 15, 2021
Motilal Oswal’s research report on KNR Construction
KNR Construction (KNRC) continued its robust performance with revenue growth of 26% YoY, surpassing our expectations by 8%. The order book (OB) was strong at INR116b (including recently won projects), with the OB/revenue ratio at 3.7x. Total pending receivables from Irrigation stood at INR7b, which the management expects to recover by end-FY22. The company is debt-free at the standalone level. The credit rating for long-term facilities was recently upgraded from IND AA- to IND AA, with a stable outlook.
We raise our FY23/FY24 estimate by 9.1%/6.4% on account of better-than-expected operating performance. The TP has been increased to INR360 on a) 16x Sep’23E EPS for the EPC business and b) P/Inv of 1x on road assets. Maintain Buy.