Buy KNR Constructions; target of Rs 310: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on KNR Constructions

Revenue grew 20% YoY, but fell 12% QoQ to ~INR8.9b in 1QFY23, 5% above our estimate. EBITDA margin fell ~90bp YoY and 200bp QoQ to 18.5% (in line). EBITDA/PAT grew 15%/38% YoY to INR1.65b/INR1b (est. INR1.57b/ INR0.9b). Depreciation expense is lower as the Irrigation capex has been reducing. Depreciation in Irrigation projects is higher than that in Roads.  Irrigation projects contributed INR3b, or 35% of revenue, in 1QFY23. Pending receivables from Irrigation projects have risen to INR8.5b at present from INR6.5b in May’22. It hasn’t received any payments after May’22 for Irrigation projects.

Outlook

We maintain our Buy with a SoTP-based TP of INR310, implying an upside of 19%.

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KNR Constructions - 140822 - moti