Buy KNR Construction; target of Rs 269: Anand Rathi

Anand Rathi's research report on KNR Construction

Its constrained OB being executed finally showed up in this quarter. KNR?s revenue growth was muted and earnings slid. This does not raise any grave concerns as growth would return once its hybrid annuity portfolio is ?appointed? (four expected shortly). We see inspiring growth in FY20 to make good the expected subdued revenue growth in FY19. It?s heartening to see a further shortening of the cash-conversion cycle; at 25 days it is indeed among the best and clearly exemplifies a sound business strategy at work.

Outlook

A well-set balance sheet, proven execution capabilities and de-risking efforts for its hybrid annuity portfolio support our preference for KNR. We retain our Buy rating on the stock.

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