Buy G R Infraprojects; target of Rs 1510: Motilal Oswal

Motilal Oswal's research report on G R Infraprojects

GRINFRA is sitting on an order book of INR156b (2x FY22 revenue). Though it has not bagged any major orders in FY23, its tender pipeline remains robust. It is targeting order inflows of INR150b in the rest of FY23. A Metro project worth INR5.9b, where it was L1 for some time, was recently annulled by the authorities. The Company is diversifying and looking at other segments like Metro and Power T&D. A strong tender pipeline in Roads and other segments can translate into decent order inflows for GRINFRA in coming months, which can provide greater visibility on growth beyond FY24. Execution is expected to remain muted in FY23 as many projects are expected to receive their appointed date by FY23-end.

Outlook

Given the current order book and robust tender pipeline, we expect execution to pick up from FY24. We expect GRINFRA to clock 11% revenue growth over FY22-24, with an EBITDA margin of 16-17%. We maintain our Buy rating with a SoTP-based TP of INR1,510. A successful diversification into other segments can open up large growth opportunities for GRINFRA.