G R Infraprojects (GRINFRA)’s revenue declined 28% YoY to ~INR11.3b during 2QFY25 (vs. our estimate of INR16.8b). GRINFRA faced a slowdown in project execution during 2Q, primarily due to heavy rainfall and fewer projects under execution. EBITDA margin stood at 10.4% (-190bp YoY) vs. our estimate of 13.2%. EBITDA declined by 40% YoY to INR1.2b (47% below our estimate). EBITDA was impacted due to lower execution. Higher other income partially offset weak operating performance. APAT declined by 6% YoY to ~INR1.2b (19% below our estimates). Due to a change in the long-term capital gain tax rate from 10% to 12.5% in the Union Budget 2024, the company incurred deferred tax of INR280m, which we added back to APAT for like-to-like comparison.
OutlookConsidering a sharp fall in execution during 2QFY25 and muted awarding activity by NHAI, we cut our EPS estimates for FY25/FY26 by 7%/9%, while broadly retaining our FY27E EPS. Given the current order book and robust tender pipeline, we expect GRINFRA to clock 8% revenue CAGR over FY24-27, with an EBITDA margin in the range of 13-15%. Reiterate BUY with a revised TP of INR1,830, based on an SoTP valuation.
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