Buy KNR Constructions; target of Rs 315 : Motilal Oswal

Motilal Oswal is bullish on KNR Constructions recommended buy rating on the stock with a target price of Rs 315 in its research report dated October 26, 2023.

Broker Research

October 29, 2023 / 11:12 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on KNR Constructions

KNR Constructions (KNRC) currently has an unexecuted order book of ~INR80b (2x of FY23 revenue). The company is expecting new order inflows of INR40-50b in FY24, which should improve its growth visibility beyond FY25. The order pipeline of INR450b is robust, and management is confident of achieving sizeable order inflows in FY24E despite the upcoming busy election schedule. KNRC is actively exploring opportunities for project bidding in various states and is also contemplating potential expansion into other infra sectors. While there have been challenges in the execution of irrigation projects, KNRC foresees a possible improvement in project execution in the upcoming months. Management is expecting improved execution during 2HFY24 driven by the Road segment. KNRC is targeting to clock a revenue of INR40b in FY24E with margins in the range of 18-19%. While order inflows have been muted, the robust tender pipeline in the Roads sector has the potential to translate into healthy order inflows in the coming months. This would offer a better growth outlook beyond FY25. The diversification into other regions and in select other infra verticals could also help order inflows.

Outlook

Based on the existing order book of INR80b, we expect KNRC to achieve a revenue CAGR of 11% over FY23-25, with an EBITDA margin ranging between 18% and 19%. We reiterate our BUY rating on the stock with an SoTP-based TP of INR315.

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