KNR
Constructions
CMP:
Rs. 227.30
COMPANY OVERVIEW:
KNR is a multi domain infrastructure development
organization with more than 2 decades of experience and executes the
construction of technically complex and high value projects across segments
such as
Express ways
National Highways
State Highways & Rural Roads
Flyovers
Bridges and Viaducts
Irrigation Projects
Urban Development - Civic amenities
Commercial and Residential Projects
KNR Construct is in the Construction &
Contracting - Civil sector. The current market capitalisation stands at Rs
640.09 crore. The company has reported a standalone sales of Rs 265.56 crore
and a Net Profit of Rs 28.01 crore for the quarter ended Mar 2014.
SHARE PERFORMANCE TO SECTOR INDEX:
(Source: EquityMaster)
FINANCIAL ANALYSIS:
According
to the results of the quarter-ended June 30, 2014, Company has generated total
income from operations worth 2365 Million in Q1 FY 2015 as against 2077 million
within the same quarter, last year; therefore, making a growth of 14%.
EBITDA for Q1 FY 2015 is 311 million as
against 287 million in Q1 FY 2014;
thereby growth of 8%.
The
Other Income has increased by 61% to 28.5 million Q1 FY
2015 as against Q1 FY 2014’s 17.7 million.
Interest Cost is down
by 21% and
Depreciation is lower in Q1 FY 2015. Profit
before Tax grew by 26% to 167 million from 124 million in Q1 FY 2014; and PAT grew by 78% to 198 million as
against 111 million, last year.
• In news on 21st Aug: KNR Constructions awarded Rs 68.37Crore order by Government of Karnataka towards "Construction of ROB with approach at Railway Km 316/200-300, road Chainage 7+695 on Davanagere - Channagiri road and at Railway Km 60/600-700 on road Chainage 42+214 on Ramdurga - Badami road" to be completed within 24 months.
• With top 5 Road Projects worth 809 Crores and Irrigation Projects worth 65 Crores, their total Order-Book quotes itself at 1202 Crores as on 30th June 2014.
POSITIVES:
- YoY quarterly Sales increased by 15% and profit by 78%.
- The QoQ and YoY interest cost has come down. May indicate that the company has reduced the debt further as their Debt to Equity ratio is 0.13 as on June 30, 2014 as against 0.17 as on March 31, 2014.
- In news on 21st Aug: KNR Constructions awarded Rs 68.37Crore order by Government of Karnataka towards "Construction of ROB with approach at Railway Km 316/200-300, road Chainage 7+695 on Davanagere - Channagiri road and at Railway Km 60/600-700 on road Chainage 42+214 on Ramdurga - Badami road" to be completed within 24 months.
- Their strengths are finishing projects before the schedule to earn bonus, own construction equipment, management oversight, good control over cost to make profits.
VALUATIONS:
The Current Market
Price of the company is 227. Thus when one looks at the EPS of 21.68 for FY
13-14, the current PE is 10.4 which is very attractive compared to the overall
Industry PE of over 20. For Q1 of FY 14-15, KNR had a quarterly EPS of Rs 7.04.
Even assuming there is no growth, the annualized EPS works out to Rs 28.16.
This translates to a forward PE of 8.06 which is very good indeed.
Given the strong
growth, good order book and high standards of project completion, this is one
of our top picks in the Infrastructure space which is now witnessing a
turnaround. We recommend this stock with a Price Target of Rs 450.
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Disclaimer: The stock may not find a place in client portfolios. Investors are requested to take the advice of a qualified Investment Advisor before making any investment
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