Buy KNR Constructions; target of Rs 301: Sharekhan

Sharekhan's research report on KNR Constructions

Q1FY24 standalone numbers were broadly in-line driven by execution of HAM projects. Standalone net working capital cycle shrunk q-o-q, while it maintains net cash surplus position. Management retained a guidance of Rs. 4,000-crore in standalone revenues and Rs. 4000-5000 crore of order inflows for FY2024. OPM may get hit if irrigation payments are not received timely. Order book at 2.1x TTM including recent wins remains healthy. It continues to explore for projects in state highways, irrigation, urban infrastructure, railways and Metro Rail segments.

Outlook

We retain Buy on KNR with an unchanged PT of Rs. 301, considering healthy earnings growth outlook led by positive sector growth outlook.