Buy KNR Construction; target of Rs 322: Anand Rathi

Anand Rathi's research report on KNR Construction

On healthy recoveries from Telangana irrigation orders and as the monetisation of three hybrid annuities was consummated in entirety, KNR regained its net-cash status. Irrigation receipts mean execution stabilises at such orders, and the recent appointment of Chittor-Thatchur mean the project is set to start contributing. These augur well, but order additions remain an area of concern, and need to be addressed at the earliest. A general trend of year-end surge in awarding, and openness to explore new segments could work to KNR’s benefit, but it is not willing to compromise on margins. Though near-term challenges persist, KNR has its priorities right.

Outlook

We retain our Buy rating, with a slightly lower TP of Rs322 (from Rs328 earlier).

For all recommendations report, click here