Buy KNR Constructions; target of Rs 333: Sharekhan

Sharekhan's research report on KNR Constructions

KNR Constructions Limited (KNR) reported a healthy beat in execution while OPM remained in-line for Q1FY2023. However, net earnings beat estimates led by lower than expected depreciation and higher other income. Management retained a Rs. 4,000-5,000 crore order inflow target for FY2023. It largely maintained Rs. 3500 crore plus standalone revenue guidance and 17-18% OPM for FY2023. It expects FY2024 standalone revenues to rise 10-15% y-o-y. High receivables outstanding in irrigation segment may lead to lower execution in the near term and hit OPM. However, collections are expected to start post two months.

Outlook

We retain a Buy on KNR with an unchanged PT of Rs. 333, considering healthy growth outlook led by strong order book.