KNR Constructions Ltd. share price target

FY20 guidance 15% revenue growth and 15.5-16% margins: KNR expects revenue growth of 15% for FY20 taking into consideration current order backlog position. It expects operating margins from the road projects to range between 15.5-16%. FY19 operating margins of 20% were supported by high margin irrigation projects, which contributed 30% to revenues. There...

View: Spike in execution in FY20E, maintain Buy KNR's revenue is up 14.6% YoY to `7.2 bn (the highest quarterly revenue in its history) in Q4FY19 (31.7% above estimates), due to robust execution. The EBITDA margin rose 80 bps YoY to 20.1% (211 bps above estimates), driven by higher contribution from the high margin irrigation segment, coupled with lower subcontracting cost. The reported PAT increased 15.6% YoY to `922 mn, due to a strong operating performance. The Adj. PAT (after...

We maintain BUY with SOTP based valuation of Rs 337/sh. KNR delivered Revenue/PAT beat of 7.6/3% led by execution of Rs 0.9bn in irrigation projects. EBIDTA margins came in at 20% aided by 20% revenue from high margin irrigation segment. Order book is now Rs 55.2bn with Rs 1.5bn new orders, largely from existing projects increase in scope of work. Bid pipeline remain strong and KNR expects to take Rs 20bn new orders in 4QFY19E, largely driven by 1 HAM (Rs 10bn) and balance from Irrigation, bridges and flyovers.

Revenues stood at INR4.5b (+3.6% YoY), in line with our estimate of INR4.4b, led by timely execution of the KP Sagar Irrigation project (INR960m revenue contribution; 20% of 3QFY19 sales), Hubli (INR600m), Madurai (INR400m), Trivandrum (INR520m) and Yedulla (INR410m). EBIDTA at INR901m (- 8% YoY) was ahead of our 13 February 2019 estimate of INR740m. Operating margins declined 260bp YoY to 20%, but was ahead of our estimate of 17.0%. Better-than-estimated margins were due to the better revenue mix (20% revenue contribution from KP Sagar Irrigation project, where margins are in excess of 20%+). PAT declined 21% YoY to INR521m, exceeding our estimate of INR339m. Dec18, order backlog stood at INR55.2b (including EPC value of HAM project), providing visibility of 2.9x its FY18 revenue. Of the total order book of INR55.2b, 94% comes in from Roads with the balance coming from the Irrigation segment.

KNR constructions (KNR), one of best managed road constructor with light balance sheet, low working capital and one of the highest RoCE among peers, reported its Q3FY19 numbers.

KNR Construction's (KNRC) sales rose 3.6% yoy to Rs4.5bn in Q3FY19 (our est. Rs4.6bn), mainly due to execution of irrigation and key road projects. EBITDAM at 20% was better than executed mainly due to execution of high margin irrigation projects. KNRC has entered into a SPA with Cube Investments to sell three HAM projects. The deal optically values the investment at about P/B 1.8x; however, factoring in the opportunity...

KNR Constructions (KNR) has the rare distinction of being a wealth creator in India's beleaguered infrastructure sector.

KNR Constructions Ltd (KNR) is a leading EPC player largely focusing on national and state highway projects. KNR has successfully executed ~6,000 lane km road projects across 12 states in India. Q2FY19 revenue growth (6%) was tepid due to low carry forward orders & challenges in getting financial closure for HAM projects....

KNR constructions (KNR), one of best managed road constructer with light balance sheet, low working capital and one of the highest RoCE among peers, reported its Q2FY19 numbers.

YoY to INR4.2b, exceeding our estimate of INR3.8b, supported by smooth execution of projects in hand. Key projects contributing to revenue were KP Sagar Irrigation Project (INR1.2b; 30% of revenue), Pollachi (INR457m), Madurai (INR416m) and Hubli (INR582m). Operating profit of INR831m (+1% 13 November 2018 YoY), too, was above our estimate of INR596m, supported by better revenue mix. Operating margin declined 100bp YoY to 20.0%, however, it was ahead of our estimate of 15.5%. Better-than-estimated margins were on account of better revenue mix (30% revenue contribution from KP Sagar Irrigation project where margins are in excess of 20% +). PAT declined 24% YoY to INR450m, exceeding our estimate of INR263m. Tax rate stood at 0.6% v/s our estimate of 10%. September 2018, order backlog stood at INR58.1b (including EPC value of HAM project), providing revenue visibility of 3.