Buy GR Infraprojects; target of Rs 1875: ICICI Securities

ICICI Securities's research report on GR Infraprojects

GR Infraprojects (GR Infra) has reported subdued Q1FY25 earnings on account of a) decline in orderbook and b) delay in allotment of the appointing date for seven projects. Revenue declined 12% YoY and EBITDA margin came in at 130% (down 160bps YoY). However, rise in other income (INR 1.1bn, 2x Q1FY24) aided in a flat quarter in terms of profit. The orderbook saw an accretion of INR 40bn. Order pipeline for FY25 is estimated at INR 2.3trn, of which GR Infra expects to capture INR 160bn in incremental orders (bringing total likely order inflow for FY25 to INR 200bn).

Outlook

We expect orderbook to improve in FY25 on higher order inflow from road, transmission and other projects. As a result, we expect revenue to grow by15% in FY26E. We maintain BUY with a revised TP of INR 1,875 (earlier INR 1,820).