J Kumar Infraprojects (JKIL) delivered 1QFY17 RPAT beat, 7.6% above our estimates (incl. Rs25mn dividend from mutual funds). Net revenue growth of 10% YoY (6.2% below estimates) was on account of subpar execution at the JNPT road project (Rs 300mn), expect strong pickup from 3QFY17E. The Balance sheet remains healthy with net debt at Rs 1.8bn & net D/E stood at 0.13x. QIP proceeds have aided deleveraging.

JKIL has finally received the LOA for the Mumbai Metro line 3 project with bid value of Rs 52bn. The dark clouds on fate of Metro project has cleared now and worst of BMC headwinds may be receding. Whilst litigation on BMC road projects continues, JKIL has been de-registered from further bidding in BMC road segment. Other State Government department, JKIL continues to eligible for bidding. Maintain BUY with TP to Rs 321/sh (15x Mar-18E EPS).