Geojit BNP Paribas's research report on KNR ConstructKNR Constructions Limited (KNR) is a leading EPC player largely focusing on national and state highway projects. KNR has successfully executed ~5,888 lane km road projects across 12 states in India. A robust order book of Rs3,470cr which is 4 times of trailing 12M revenue adds strong visibility & scalability over the next 2-3 yrs. The budgetary allocation of Rs970bn for roads & highways and ~10,000km of national highways in FY17 are additional stimulus. Proven track record with project execution much ahead the deadline helps to get repeat orders. EBITDA margins have already improved by 169bps in 9MFY16. We expect revenue & earnings CAGR of 17% and 23% over FY15-FY18E. A strong balance sheet, efficient working capital management and comfortable debt/equity ratio at 0.9x, make KNR a favourable pick. At the CMP of Rs508 we value standalone business at a PE of 10x FY18E EPS and BOT projects at 1xP/B to arrive at SOTP target price of Rs595 with a BUY rating.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.
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