Buy KNR Constructions; target of Rs 310: Motilal Oswal

Motilal Oswal is bullish on KNR Constructions recommended buy rating on the stock with a target price of Rs 310 in its research report dated May 12, 2023.

Broker Research

May 15, 2023 / 15:02 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on KNR Constructions

By securing ~INR20b worth of new orders in 4QFY23, KNR Constructions (KNR) enhanced its total order book to ~INR 100b (calculated based on order announced post 3Q FY23). These orders alleviate concerns about the depleting order book. The order book to bill ratio of KNR now stands at ~3x FY23E, providing strong revenue visibility over the next two years. For its irrigation projects, KNR is expected to bid cautiously prioritizing the execution of its existing pending Irrigation order book and ensuring timely receipt of payments. Higher allocation to Ministry of Roads (up 36% YoY) in the Union Budget of FY24E, ahead of the upcoming general elections in FY24 is expected to contribute to a strong momentum in project awarding and execution throughout FY24. The robust tender pipeline in the Roads sector is likely to result in decent order inflows in FY24, providing provide enhanced visibility on growth in FY25 and beyond. Considering KNR's current order book value of ~INR 100b, we expect a 12% revenue CAGR over FY23-25. The margins are likely to be in the range of 18% to 20%. With this positive outlook, we reiterate our BUY rating with a target price of INR 310 based on Sum of the Parts (SoTP) valuation.

Outlook

We expect KNR to report revenue/EBITDA/PAT CAGR of 12%/10%/12% over FY23-25E along with stable margins. We reiterate our BUY rating with a SoTPbased TP of INR310.

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