KNR Constructions Ltd. share price target

Debtor's days remain the best in the industry at 35 days. With recent price outperformance we downgrade KNRC to NEUTRAL from BUY. Maintain SOTP of Rs 228/sh. KNRC delivered Revenue/EBIDTA beat 21.8/20.1% led by strong order book execution. Despite robust headline numbers, higher depreciation and lower adjusted other income/higher claims award/MAT credit led to 5.7% APAT beat. The B/S is healthy, with standalone net debt at Rs 1.1bn (net D/E at 0.1x, -0.01x adjusting for promoters loan of Rs 1.2bn).

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 Q1FY18 numbers. Topline grew by...

Even excluding claim recognition of Rs168mn, KNR meets our Revenue/EBITDA/net profit expectations of Rs3.4bn/Rs499mn/Rs380mn. Including claims from disputed JVs, KNRC reports Rs4.8bn/Rs844mn/Rs675mn respectively. With Rs33bn in order backlog, translating into a mediocre book-bill of 2x FY18E revenues, we keep our fingers crossed. On order inflows, the narrative is yet to match reality. KNRC, however, guides for revenue exceeding Rs20bn in FY19. We draw from the company capital allocation policy. And we feel the risk-reward...

KNR Constructions (KNRC) continued to report an above par performance in 1QFY18 marked by better-than-expected revenue booking (revenue surged by ~53% YoY to Rs4.6bn). A healthy order inflow especially in 1HFY17 and execution ramp-up in new projects led to better revenue booking. Whilst EBITDA rose by a strong 53% YoY to Rs675mn, EBITDA margins stood at 14.6% (flat on YoY). Better operating performance, higher other operating income due to Rs168mn claims received from two JVs and negative tax boosted its PAT by 124% YoY and 29% QoQ to Rs676mn. Though KNRC did not secure any fresh order during the quarter, it expects securing orders worth Rs20-25bn in FY18. Notably, even current order book at Rs33.4bn (2x TTM revenue)...

KNR Constructions Limited is a multi-domain infrastructure project development company. The Company undertakes engineering, procurement and construction (EPC) contracts, as well as build-operate-transfer (BOT) projects across various sectors, such as construction and maintenance of roads, highways, flyovers and bridges. Its range of verticals also include irrigation projects, water management, agriculture and trading...

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....

the conventional top four projects, KNRC adds two-tier flyover project of Salem city adds to its feather. The top four includes: Madurai-Ramanathpuram Section of NH-49; Thiruvananthapuram Bypass; Pollachi-Coimbatore; and Hubli-hospet continues to surprises us. The EBITDA margins have petered down to long-term average of 15%. Working Capital days, however, is at seven-year low: 41. With arbitration between state and contractor institutionalized, such commendable working capital trend could be the mainstay. We note a key-state risk. The geographical exposure of marquee projects continues to be in Tamil Nadu a recently turned politically volatile state. Further, with lowered interest outgo, jump in net...

KNR Constructions (KNRC) continued to report an above par performance in 4QFY17 on the back of better-than-expected revenue booking. Its revenue surged by ~65% YoY to Rs4.9bn. A healthy order inflow especially in 1HFY17 and execution ramp-up in new projects led to better revenue booking. Whilst EBITDA rose by strong 82% YoY and 35% QoQ to Rs752mn, EBITDA margins stood at 15.5% (+147bps YoY and +80bps QoQ). Despite other operating loss of Rs30mn, KNRC's reported PAT came in at Rs524mn (vs. our estimate of Rs475mn) owing to better operating performance and negative tax. KNRC which has consistently been beating its own guidance over the years on the back of superior execution skill expects revenue...

KNRC delivered a stellar 4QFY17 net profit beat, 32.3% ahead of our estimates. This was achieved despite a loss of Rs 30mn from JV, and other income reversal of Rs 110mn. The B/S is healthy, with standalone net debt at Rs 1.21bn (net D/E at 0.13x, -0.01x adjusting for promoters? loan of Rs 1.2bn).

Adjusted for exceptional, KNRC maintains good spell: KNR beats our expectations. The top four projects continue to deliver: Madurai-Ramanathpuram Section of NH-49; Thiruvananthapuram Bypass; Pollachi-Coimbatore; and Upgrading Arcot-Villupuram Road continues to surprises us. We estimated Revenue/EBITDA/Net Profit at Rs3.7bn/Rs535 mn/Rs361 mn. As against, company reported Rs3.8bn/Rs577mn/Rs307, excluding Rs108mn in exceptional item. True, EBITDA margins has lowered by 600 plus basis point to 15.1%. Working Capital days, however, is at six year low: 38. With arbitration institutionalized, we think this could be the trend forward. The pace of execution is happening even with the current ongoing uncertainty in Tamil Nadu. Further, with lowered interest outgo, jump in net profit was...