JKIL posted 24.5%/ 41.3%/ 87.3% YoY de-growth in revenue/ EBITDA/ APAT to Rs4.8 bn/ Rs632 mn/ Rs71 mn in Q2FY21. We broadly maintain our FY21E/ FY22E estimates factoring H1FY21 results. We introduce FY23E estimates. JKIL’s stable revenue growth (11.8% CAGR over FY20-23E) and EBITDA margin of 12.3%/ 14.0%/ 14.0% in FY21E/ FY22E/ FY23E will lead to healthy CAGR of 9.5% in its bottom line over FY20-23E. We, therefore, expect the RoCE and RoE to increase to 12.2%/ 11.3% in FY23E from 11.4%/ 10.5% in FY20. With gradual improvement in labour and supply chain coupled with strong orderbook of Rs106.4 bn and various opportunities available in metro and high speed rail segments, we expect strong PAT growth of 265.1%/ 43.2% in FY22E/ FY23E.
OutlookThus, we upgrade to Buy with a revised TP of Rs162 (6x Sep’22E EPS).
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