ICICI Direct initiates Coverage on GR Infraprojects Ltd with Buy rating

GR Infraprojects Ltd (GRIL) is a leading player in the roads and highways sector with ~6% market share in NHAI road orders.

- The company has delivered 30.3% revenue CAGR during FY16-21 (vis-à-vis HG Infra's, KNR's, PNC's revenue CAGR of 28.8%, 24.6%, 19.8% respectively), well-complemented by 42.2% EBITDA CAGR and 49.1% PAT CAGR

Key triggers for future price performance

- GRIL is targeting a) railways: projects involving earthwork, bridge construction, track linking, and laying of optical fibre cables, b) metros: civil engineering work and c) power transmission business: to participate in tariff based competitive bidding. Overall, it is aiming at 15-20% revenue contribution from non-roads segment over the medium-to-longer term

- We expect the prudent bidding discipline from GRIL to continue ahead with a) larger number and higher valued jobs coming under HAM model and b) major developers focusing on balanced EPC and HAM portfolio. Further, GRIL is targeting HAM projects with 20%+ operating margins - much better than EPC jobs having 14-15% margin, which ensures better IRRs and profitability

- The balance sheet is expected to remain lean with 0.2x net D/E whereas monetisation of HAM portfolio would free up tied up-capital

For details, click on the link below: Link to the report

Shares of G R Infraprojects Ltd was last trading in BSE at Rs. 1436.05 as compared to the previous close of Rs. 1413.80. The total number of shares traded during the day was 5364 in over 1077 trades.

The stock hit an intraday high of Rs. 1530.00 and intraday low of 1413.80. The net turnover during the day was Rs. 7739244.00.

Source : Equity Bulls

Keywords

GRInfraprojects INE201P01022 GRINFRA Construction Engineering InitiatingCoverage BUY ICICIDirect