Buy G R Infraproject; target of Rs 2083: Edelweiss Securities

Edelweiss Securities' report on G R Infraproject

G R Infraprojects (GRIL) is a premier EPC company with a dominant presence in the roads segment. It has been an arduous journey with many milestones, whose financial imprint is clear: a CAGR of about 30% each in revenue/EBITDA/PAT over FY11–21, best-in-class working capital cycle, low leverage (~0.2x) and high RoEs (20%-plus). Our bullish view on GRIL is built on its road map—segmental diversification and strong cash flow. While a large base will moderate revenue/PAT CAGR to 14%/12% over FY21–24E (FY21 EBITDA included ~INR2.1bn bonus) with RoEs in high teens, GRIL has miles to cover still.

Outlook

Initiate at ‘BUY’ with an SoTP-based TP of INR2,083. Watch out for pace of segmental diversification.