Buy KNR Constructions; target of Rs 335: HDFC Securities

HDFC Securities is bullish on KNR Constructions has recommended buy rating on the stock with a target price of Rs 335 in its research report dated February 10, 2023.

Broker Research

February 17, 2023 / 13:18 IST

26 Aug, 2025 12:21

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HDFC Securities' research report on KNR Constructions

KNR delivered a strong quarter, with revenue/EBITDA/APAT of INR 8.3/1.6/0.8bn beating our estimates by 1/(2)/(9)%. FY23 revenue guidance remained unchanged at INR 35bn, with the EBITDA margin pegged at 18-19%. At the standalone level, the gross/net debt (cash) stood at NIL/(INR 1.2bn) as of Dec’22 vs. INR 2/1.3bn as of Sep’22. The balance HAM equity requirement is INR 4.4bn as of Dec’22 with INR 0.8/2.5/1bn to be invested in Q4FY23/FY24/FY25. KNR incurred a Capex of INR 1.1bn in 9MFY23 vs. FY23 guidance of INR 1.5bn. The NWC days stood at 53 as of Dec’22 (vs. 54 as of Sep’22). The irrigation receivables as of Dec’22 stood at INR 6.5bn vs. INR 9 bn as of Sep’22. We cut our estimates to factor in lower margins.

Outlook

We maintain BUY with a reduced TP of INR 335/sh (18x Dec-24E EPS, HAM 1x P/BV).

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