Dolat Capital Market's research report on KNR Constructions
KNR posted revenue below estimates however, EBITDA margins and APAT above estimates. KNR posted 23.0%/ 8.7%/ 77.1% YoY growth in revenue/ EBITDA/ Adj. PAT to Rs6.9 bn/ Rs1.4 bn/ Rs776 mn in Q3FY21. We broadly maintain our FY21E/ FY22E estimates factoring 9MFY21 results. We however upgrade revenue estimates by 8.2% for FY23E as we have upgraded our FY21E order inflow estimates from Rs59.7 bn to Rs75.1 bn and expect it to execute in FY23E. Accordingly we increase our APAT estimates by 17.9% for FY23E. KNR is currently working at pre covid levels.
Outlook
We expect a 22.0%/ 25.7% revenue/ APAT CAGR over FY20-23E, with EBITDA margins of 19.9%/ 18.4%/ 18.4% for FY21E/ FY22E/ FY23E. Although we factor healthy return ratios, a well-managed balance sheet, comfortable working capital, low D:E, quality management and pick up in pace of execution; the stock has increased 95% since our Q2FY21 report dated 13 Nov’20 thus we downgrade to Accumulate with a SOTP-based TP to Rs240 (15x FY23E EPS and 1.2x PB for HAM investment).
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