Result Update: KNR Constructions Ltd - ACCUMULATE - TP Rs.348 - Kotak

KNR Constructions reported strong Q3FY18 results. Net sales for the quarter grew at 13.3% yoy to Rs 4.3 bn on decent execution across projects. EBITDA for the quarter stood at Rs 984 mn, up 70.6% yoy with EBITDA margins at 22.7% up 760 bps yoy. The improvement is margin was due to higher contribution from projects near completion. Based on strong margins in most of the current projects, the company targets for 16-17% EBITDA margins in FY18E. KNR has an order backlog of Rs 33.3 bn at the end of Q3FY18. Further, it has strong bid pipeline of 30 projects in roads space worth Rs 350 bn and are expected to open in February-March 2018. Further it is L1/well placed in Rs 11.7 bn of HAM project. Based on strong bid pipeline, KNR targets to add Rs 25-30 bn of new orders in FY18E. The company has maintained its guidance to achieve over Rs 18 bn revenue in FY18E and 15% growth in FY19E. KNR has track record of beating its guidance and we expect the trend to continue looking at its order pipeline. We have marginally revised our EPS estimates for FY18E and FY19E and introduce FY20E estimates. We recommend ACCUMULATE (Vs Buy) rating on the stock with revised target price of Rs 348 (Vs Rs 322 earlier).

Shares of KNR CONSTRUCTIONS LTD. was last trading in BSE at Rs.319 as compared to the previous close of Rs. 321.1. The total number of shares traded during the day was 30998 in over 1019 trades.

The stock hit an intraday high of Rs. 328.3 and intraday low of 310. The net turnover during the day was Rs. 9913670.

Source : Equity Bulls

Keywords