Buy J.Kumar Infraprojects; target of Rs 260: Prabhudas Lilladher

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26 Aug, 2025 12:21

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JKIL reported a strong set of numbers with revenues and margins coming in above our and street estimates on the back of better than anticipated execution levels. Major part of JKIL’s Order Book of Rs109bn is already in execution, while the new projects (Worli elevated corridor and Surat Metro) would start contributing to revenues from 1QFY22E. On the back of sharp execution pickup, strong order book and healthy bid pipeline, management raised its guidance for FY21 revenues to Rs24-25bn (earlier Rs22bn) while maintaining its FY22 guidance at ~Rs35bn topline. With a strong track record of executing roads, bridges, structural buildings, urban infrastructure such as metro, railways, subways and skywalks, JKIL stands strong on the back of a) healthy order book (~Rs109bn as at 3QFY21) with increasing ticket size, b) strong execution capabilities, c) controlled debt levels (Net D:E of ~0.1x), and d) strong EBITDA margins (~15-16% over FY16- 20). On the back of strong 9M performance, revised management guidance and strong outlook, we have raised our revenue estimates for FY21E/22E/23E by 12.5%/3.3%/3.1% and earnings estimates by 28.8%/0.5%/0.2% respectively.

At CMP, the stock trades at a P/E of 16.2x/6.4x on FY21E/ FY22E EPS and an EV of 5.6x/3.6x of FY21E/ FY22E EBITDA. We roll over to FY23 estimates and raise our target PE multiple from 6x to 7x (30% discount to peers). We maintain BUY rating with a TP of Rs260 (earlier Rs176).

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