Buy KNR Constructions; target of Rs 304: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on KNR Constructions

We believe this development is positive for the company, as it will further strengthen its balance sheet. KNR remains strong in fundamentals backed by strong execution capabilities, healthy operating margins and industry best working capital cycle. KNRC order book stands healthy at ~4x TTM revenues giving us comfortable revenue visibility for next 2-3 years. We expect KNRC to post a revenue/EBITDA CAGR of 19%/9% over FY19-FY22E supported by ramp ups from the existing order book.

Outlook

We maintain BUY rating with a SOTP of Rs304 which includes ~Rs269 for the standalone EPC business based on 16x FY21E EPS and ~Rs35 for BOT projects based on 1x equity invested. At the CMP, the stock trades at a P/E of 20.3x FY20E and 16.6x FY21E EPS and EV/EBITDA of 10.5x FY20E and 8.8x FY21E EBITDA.

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