Buy J.Kumar ; target of Rs 392: Emkay

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Emkay's research report on J.KumarRevenue (excld. other operating income) came in at Rs2.99 bn +0.9% YoY lower than our expectations of Rs3.5 bn due to lower than expected execution run rate, as projects worth Rs20 bn garnered since Q3FY15 are taking time to ramp up■ EBITDA (excld. other operating income) came in at Rs461 mn -12.9% YoY versus expectation of Rs603 mn and EBITDA margin excluding other operating income came at 15.4% -245 bps YoY versus expectation of 17.8%■ Net profit came at Rs240 mn +0.3% YoY versus expectation of Rs275 mn due to lower than expected operational profitability and interest cost, interest expense down 30% YoY/21.7% QoQ at Rs127 mn. Interest cost edged lower on sequential basis due to lower utilization of working capital as company has money from the QIP proceeds■ We reduce our FY17E/18E EPS by 24.9%/8.4% as we lower the contribution from Mumbai metro project in FY17E/18E by 50%/20% factoring the delay in the Mumbai metro order. We Maintain Buy with the revised target price of Rs392 (reduced E&C multiple to 15x from 16x)HighlightsThe incremental work left from Delhi metro project stands at Rs4.7 bn which is expected to get completed over the next 1-1.5 years. J. Kumar Infra expects to clock revenue of Rs14.5-15 bn in FY16E, and a PAT of Rs1.1 bn. The company has lowered its revenue guidance by about Rs1 bn on account of new projects taking time to ramp up and not much execution remaining in the older projects which are nearing completion. Rs23 bn of the total order book consists of newly won orders. The company faced delay in commencing execution of its JNPT road packages as there was issue of utilities and mangroves which the government took time to clear. The company got LoI on the project but appointment date got delayed by 2-3 months on account of the above issues. This caused a miss on revenues in Q3FY16. The company expects interest cost to reduce further by Rs60-80 mn in Q4FY16E. The company has removed the two Mumbai Metro projects worth Rs52.36 bn combined from its L1 list. The company is L1 in 2 contiguous packages totaling to Rs52.36 bn. The company has bid in a JV with China Railway where the company’s stake is 74%. The company expects to clock revenue of Rs17 bn and PAT of Rs1.23 bn (ex Mumbai Metro – III execution). It expects to clock revenue of Rs20-21 bn and PAT of Rs1.45 bn (including Mumbai Metro – III execution). About Rs3 bn revenue expected to come from Mumbai Metro – III.
The company expects to clock revenue of Rs7-8 bn from Mumbai Metro – III in FY18E and Rs19 bn from rest of the order book.The company has incurred capex of Rs300 mn over 9MFY16 and expects to incur capex of Rs1 bn in FY17E including Mumbai Metro capex (Rs300 mn ex Mumbai Metro – III). The total capex required for Mumbai Metro – III will be Rs3 bn spread over 2-2.5 years. The company is required to purchase 1 new TBM for each package costing Rs1.5 bn each. The company will employ 5 TBMs on its 2 packages (3 old TBMs from DMRC project and 2 new TBMs).

For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More