Result Update: KNR Constructions Ltd - ACCUMULATE - TP Rs.236 - Kotak

KNR Constructions Q1FY18 results were ahead of our estimates. Net sales for the quarter grew by 58.6% yoy to Rs 4.8 bn as against estimates of Rs 3.6 bn on strong execution in the quarter. EBITDA after adjusting for receipt of prior year's claim of Rs 168 mn for the quarter stood at Rs 677 mn, up 55% yoy led by strong revenue growth. Adjusted EBITDA margins came in at 14.6% up 20 bps yoy. Adjusted PAT for the quarter grew by 68% yoy to Rs 508 mn (Vs our estimates of Rs 270 mn) on strong topline growth. KNR has an order backlog of Rs 33.4 bn at the end of Q1FY18 which declined on qoq as the company did not add any major order in the quarter. The company has strong bid pipeline in roads and irrigation space and targets to add Rs 20-25 bn of new orders in FY18E and FY19E. Based on execution timeline of current order book and future pipeline, the company maintained its guidance to achieve over Rs 17-18 bn and Rs 20 bn of revenue in FY18E and FY19E, respectively. The management remained conservative on revising guidance after robust Q1FY18 as it expects Q2FY18 to be slower during the rainfall interrupting work in southern region. The company has track record of beating its guidance and we expect the trend to continue looking at order book and pipeline. We revise our EPS estimates factoring in higher execution in Q1FY18. We maintain our ACCUMULATE rating on the stock with revised target price of Rs 236 (Vs Rs 215 earlier) based on revised earnings.

Shares of KNR CONSTRUCTIONS LTD. was last trading in BSE at Rs.218.6 as compared to the previous close of Rs. 220.1. The total number of shares traded during the day was 6993 in over 228 trades.

The stock hit an intraday high of Rs. 223.9 and intraday low of 216.1. The net turnover during the day was Rs. 1539567.

Source : Equity Bulls

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