2021-08-27 KNR Constructions Ltd. Axis Direct 318.45 360.00 318.45
(4.47%) 8.21 Buy

Initiating Coverage:KNR Construct.

We initiate coverage with a BUY and value the EPC business at 17.5x FY24E EPS and HAM portfolio at 1x book value, to arrive at a target price of Rs.360/share, implying an upside potential of 17% from the current levels.

2021-08-19 KNR Constructions Ltd. Geojit BNP Paribas

 

287.45 341.00 287.45
(15.74%) 2.49 Accumulate

KNR CONSTRUCTIONS LIMITED

Q1FY22 revenue grew by 54% YoY driven by pick up in execution post ease in lockdown and increase in operational efficiency to 95% of pre-covid level. Order book stood at Rs11,679cr (incl. L1) which is 3.9x TTM revenue and adds revenue visibility for two to three years. EBITDA margin declined by 31bps YoY to 19.4% due to higher material cost and other expenses. The management expects an order inflow of ~Rs3,000cr in...

2021-08-16 KNR Constructions Ltd. IDBI Capital

 

297.30 329.00 297.30
(11.91%) -1.11 Buy

KNR construction: Q1FY22 Result Review

Targeting order inflow of Rs30-40bn in FY22: Q1FY22 Order book at Rs117bn (incl L1 and OB equals 4x TTM Revenue) and during the quarter KNRC has received 1 HAM project worth Rs10bn. And company is targeting additional orders of Rs20-30bn in remaining part of FY22E. In irrigation orders of Rs30bn , KNR has land issue for orders of Rs7bn (Kerala order) and expect all requisite approval by Jan-22E. Outlook on receivables: Q1FY22 Net working capital (NWC) days has reduced to 66 days vs 82 days QoQ. Receivables of Rs6.5bn (vs Rs5bn as on FY21) are still pending from the Government of Telangana. Out of which company expects to receive...

2021-08-16 KNR Constructions Ltd. ICICI Securities Limited

297.30 340.00 297.30
(11.91%) 2.19 Buy

KNR Constructions

Price escalation clause in roads agreement and higher margins at irrigation projects likely to keep operating margin elevated Key Risk: (i) Delay in HAM projects execution; (ii) Any working capital...

2021-08-14 KNR Constructions Ltd. HDFC Securities

285.80 332.00 285.80
(16.41%) -0.21 Buy

HSIE Results Daily: Bharat Petroleum Corporation, Cadila Healthcare, Hero Motocorp, Aurobindo Pharma, Indraprastha Gas, Cummins, Oil ...

Indraprastha Gas: Our BUY recommendation on Indraprastha Gas with a target price of INR 691 is premised on (1) robust volume growth, led by its quasi-monopolistic position in Delhi/NCR with regulatory support in the form of prioritised gas allocation and (2) a portfolio of mature, semi-mature and new geographical areas (GA). Q1FY22 EBITDA was 15% below our estimate and PAT was 17% below, owing to lower-than-expected sales volume, higher-than-expected gas cost and higher-than-expected operating expenses, partially offset by higher-than-expected other income. Cummins: Cummins India Ltd. (CIL) delivered robust performance with beat on revenue at 7% and in-line EBITDA and PAT in spite of ~4 weeks of downtime during the quarter. CIL has re-energised its product portfolio, introduced new power gen and industrial products with 20-25% better product density vs peers. We continue to remain positive on CIL on account of: (1) new product offerings; (2) global consolidation and increased investment in clean tech; (3) start of a new Capex cycle globally; and (4) exports ramp-up, given global economies are on the path to recovery. We maintain BUY on CIL with SOTP-based target price revised to INR 1,147 (roll over to Jun-23E; INR 1,024 earlier). We have increased FY22E/23E EPS by 5.9%/11.3% to account for the strong export/domestic demand and improving supply chain. Oil India: Our BUY recommendation on Oil India with a price target of INR 200 is premised on (1) increase in crude price realisation and (2) improvement in domestic gas price realisation (at USD 2.5/mmbtu). We expect oil price realisation to increase to ~USD...

2021-08-13 KNR Constructions Ltd. Prabhudas Lilladhar

302.75 314.00 302.75
(9.89%) Target met Accumulate

Q1FY22 Result Update - Robust execution - ACCUMULATE

Given strong 1Q, management guided for revenues of Rs34bn (given current condition) in FY22 with EBITDAM sustainable at 17-18% range. KNR Constructions posted strong results beating our & street estimates, despite second wave of pandemic impacting execution. Margins were better...

2021-05-24 KNR Constructions Ltd. Geojit BNP Paribas 217.05 281.00 217.05
(53.28%) Target met Buy

KNR CONSTRUCTIONS LIMITED

Order book grew by 36% YoY aided by Rs8,400cr of inflows in FY21, provides revenue visibility for the coming years. EBITDA margin declined by 227bps YoY to 19.5% due to higher material cost and sub-contracting expenses. Q1FY22 execution is likely to impact due to the second wave of Covid and reduction in workforce efficiency to 60%-70%. Govts strong thrust on infra and NHAIs strong order pipeline to support growth prospects in the long term....

2021-05-23 KNR Constructions Ltd. IDBI Capital 217.05 254.00 217.05
(53.28%) Target met Accumulate

KNR construction: Q4FY21 Result Review

KNR Construction (KNRC) PAT was higher than our estimate and is led by better execution (Q4FY21 revenue up 39% YoY). Despite pandemic which impacted Q1FY21, FY21 Revenue is up 20% YoY versus KNR guidance 10-11% increase. In Q4FY21 Project execution has gained pace and average execution efficiency stood at 95%. KNRC has highlighted the efficiency has reduced to 50-55% due to Covid in Q1FY22. But it expects momentum to pick up in the coming quarters and has guided for revenue of Rs30bn+ for FY22. Order Inflow in FY21 was highest ever for KNR. With this, KNR has strong order book of Rs114bn i.e. 4x FY21 revenue. But increase in the commodity prices could weigh on the EBITDA margin. We have lowered...

2021-05-23 KNR Constructions Ltd. Motilal Oswal 233.45 265.00 233.45
(42.51%) Target met Buy

Another strong quarter; order book remains robust

KNR Construction (KNRC) continued its steady performance with revenue growth of 39% YoY, surpassing our expectations by 19%. The company ended FY21 with revenue growth of 22% (despite the lockdowns). The order book (OB) was strong at INR71.2b, and including L1 orders worth INR43b, the OB-to-revenue ratio stood at 4.2x. The pending receivables from the Telangana government now stand at INR5b (including unbilled revenue), with some amount of delay attributable to the ongoing pandemic. Gross debt was negligible at INR7m at the end of...

2021-05-22 KNR Constructions Ltd. ICICI Securities Limited 227.75 270.00 227.75
(46.08%) Target met Buy

KNR Constructions

At the end of Q4, KNRs order book was at | 7,117.9 crore, mainly contributed by irrigation (43.7%), roads - HAM (25.5%) and roads - EPC (30.8%) segments. Including the recently won two HAM and one EPC projects (worth | 4322.9 crore), its order book position was robust at | 11,441 crore (4.2x book to FY21 revenues). With a handful of orders, the company is aiming to bag | 3,000-4,000 crore of orders in FY22. Going ahead, KNR expects its execution pace to get impacted in the near term with decline in execution efficiency currently at ~65% (from 95% in Q4) owing to...

2021-02-23 KNR Constructions Ltd. HDFC Securities 209.40 281.00 209.40
(58.88%) Target met Buy

Industrials: Bullish undertone, favourable valuation

TOP PICKS: LT, KNR, PNC Infra, Ashoka, NCC, Capacite Infra, ITD and KPTL. HDFC Securities Institutional Equities (HSIE) hosted the 4th Annual Infrastructure Investors Forum on 18/19th Feb 2021, though virtual this time. We had attendees from 12 large listed Industrials/Infrastructure companies represented by Promoters, CEO/CFO/IR teams. After almost a decade, there is strong/consensus optimism building up for the Indian Infrastructure story. Ordering has moved beyond roads with focus now on health, education, portable water, renewable energy, manufacturing expansion, uptick in real estate cycle and all this is coinciding with relatively lower crude prices, lowest interest rate and improving GDP/Tax collection. Companies remain bullish whilst valuation is still at 40-50% discount to cross cycle mean. We maintain constructive as envisaged in our thematic On Road to Rerating and Triggering a New Cycle.

2021-02-16 KNR Constructions Ltd. Edelweiss 220.05 300.00 220.05
(51.19%) Target met Buy 2021-02-14 KNR Constructions Ltd. Motilal Oswal 220.05 265.00 220.05
(51.19%) Target met Buy

Execution remains strong; order book robust

KNR Construction (KNRC) continued its steady performance in terms of execution by reporting revenue 6% above our expectation. EBITDA margin remained higher than our estimate of 19% on rising share of higher margin Irrigation projects (29% of total revenue in 3QFY21). Order book (OB) stood...

2021-02-14 KNR Constructions Ltd. IDBI Capital 213.25 254.00 213.25
(56.01%) Target met Accumulate

KNR construction: Q3FY21 Result Review

KNR construction LTD (KNRC) Q3FY21 EBITDA was higher than our estimate by 16%. This was led by better execution (revenue up 23% YoY) in the quarter. YTDFY21 order inflow stood at Rs40bn and KNRC guides for incremental orders of Rs30-40bn in Q4FY21. We have increased our execution run rate for FY21 and FY22 to 20% pa and this has resulted in increase in the EPS by 23%/28%. We have revised our valuation multiple for EPC construction business to 18x (earlier 15x), thus TP is revised to Rs254 (earlier Rs172). Stock is up 50% since Dec-20 and re-retaining ACCUMULATE rating on the stock. At our TP, implied valuation is 20x FY23E EPS (30% premium to +1 STD of its means of last 10 years)....

2021-02-14 KNR Constructions Ltd. ICICI Securities Limited 221.85 270.00 221.85
(49.97%) Target met Buy

KNR Construction

Healthy order book position; execution to pick up ahead KNRs order book was robust at | 7,664 crore (3.1x order book to TTM revenues), mainly contributed by irrigation (45%), roads - HAM (30%) and roads - EPC (25%) segments. Additionally, KNR secured a road EPC project worth | 539 crore in Tamil Nadu in January, 2021, strengthening its order book further. Going forward, the company has submitted bids for 16 road projects (15 HAM, one EPC) worth ~| 20,000 crore and aims to bag ~| 3,000-4,000 crore of orders in remainder of FY21. On execution front, its...

2021-02-13 KNR Constructions Ltd. HDFC Securities 221.85 281.00 221.85
(49.97%) Target met Buy

HSIE Results Daily: Berger Paints, Petronet LNG, ACC, Oil India, KNR Constructions, Karur Vysya Bank, Repco ...

Karur Vysya Bank: KNR met expectations and delivered largely in-line numbers, with revenue/EBIDTA/APAT vs HSIE estimates at -6/-3/+4%. Roads/irrigation segment contributed 58/42% to the order book (OB). The OB is robust at Rs 82bn (vs. Rs 85.5bn QoQ, ~3.6x FY20), having won projects worth Rs 5.4bn in 3QFY21 (1 order), and Rs ~40bn in 9MFY21. The NHAI bid pipeline is strong with KNR targeting Rs ~30-40bn inflow for the rest of FY21. It has bid for 15 projects totalling Rs ~200bn, and will participate actively in upcoming NHAI bids. 4QFY21 is expected to be a very strong quarter in terms of awarding. KNR is gearing up to further diversify into water & urban infra projects. We maintain a BUY on KNR with an increased target price of Rs 281/sh. We have increased our multiple from 15x to 18x, and roll forward our valuation to Mar-23E. Repco Home Finance: REPCOs 3Q performance surprised positively on several fronts- (1) margins improved aided by falling CoF, (2) the rise in pro forma stress was measured, (3) restructuring undershot previous management guidance and (4) stage III coverage improved. We maintain ADD with a revised target price of INR 306. Attractive valuations, better-than-expected asset quality performance and the companys comfortable capital position underpin our stance. Capacite Infraprojects: Whilst CIL missed our revenue/EBIDTA estimates by 12/11%, EBITDA margin outperformance led to in-line APAT. Despite multiple headwinds (urban areas were the worst hit by COVID-19, large exposure to real estate sector), CIL execution is gradually recovering towards normalcy with the company guiding for...

2021-02-12 KNR Constructions Ltd. Prabhudas Lilladhar 219.00 243.00 219.00
(51.92%) Target met Accumulate

Q3FY21 Result Update - Persistent strong execution - Downgrade to Accumulate

KNR Constructions reported a strong quarter with revenue (up 23% YoY) and margins coming above our and street estimates. EBITDAM sustained at higher levels of 19.7% mainly due to higher share of irrigation projects in revenue mix (29% in 3Q) as well as Order Book (at 45%). Working capital position remains strong on the back of timely payments from NHAI & other State/Central Govt authorities. Realization of large part of dues (Rs5.4bn) from Telangana Govt further strengthened the liquidity position. On the backdrop of strong order book, healthy bid pipeline and sustained liquidity...

2021-02-03 KNR Constructions Ltd. ICICI Securities Limited 219.20 260.00 219.20
(51.78%) Pre-Bonus/
Split Buy

KNR Construction

Together, roads & highways were clearly the most resilient segment of infrastructure. On the overall capex front, for roads and highways, the revised estimates (RE) FY21E spends is pegged ~12%, higher at | 92053 crore vs. budgeted estimates (BE) of | 81975. Even for FY22E, the government has pegged the road capex at | 108230 crore, growth of 17% YoY on a decent FY21 base. Of the total allocation, the National Highways Authority of India (NHAI) will get | 57,350 crore, up from | 49,050 crore in FY21RE. The government is also looking to provide alternative...

2020-12-21 KNR Constructions Ltd. IDBI Capital 163.83 163.83
(103.08%) Pre-Bonus/
Split Accumulate

KNR Construction: Company Update

Lean balance sheet: KNRC has invested Rs2.5bn in HAM projects plan to invest Rs4.1bn until FY23E. This will be funded from internal accruals. KNRC balance sheet continues to remain lean with H1FY21 standalone debt at Rs640mn and Debt to Equity at...

2020-11-18 KNR Constructions Ltd. Dolat Capital

260.70 336.00 260.70
(27.62%) Target met Buy

KNR Construct

Stake sale in KNR Walayar BOT to Cube Highways concluded at equity value of Rs3.85bn and company received first tranche of Rs3.1bn. KNR Constructions posted a strong set of numbers with revenues (up 10% YoY) and margins above our and street estimates. Labour availability and operational efficiency across project sites have been recovering gradually,...

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