Anand Rathi 's research report on KNR Construction
Its penchant to deliver better than expected on execution and margins continued even during the Covid-impacted Q4. More inspiring were pruned gross and net debt, implying management continues to strike a fine balance between the income statement and balance sheet. With its sound strategy intact, we see the Covid-disruption as short-lived, and KNR recovering from this largely unscathed (consequently, better placed). It also appears insulated from an expected near-term slowdown in ordering, thanks to the recently added irrigation orders. Its proven execution capabilities, augmented order backlog and a well-placed balance sheet give us confidence to retain our Buy call.
Outlook
Adjusting for the Covid-impact, FY21e earnings are ~35% lower and raised margin-expectation leaves FY22e earnings up ~4%. At present, the stock (excl. investments) trades at 8.7x FY22e EPS.
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