Dolat Capital's research report on KNR Constructions
KNR posted revenue in line however, EBITDA margins and PAT above estimates. KNR posted 3.2%/ 4.8%/ (16.6%) YoY growth in revenue/ EBITDA/ Adj. PAT to Rs4.8 bn/ Rs943 mn/ Rs398 mn in Q1FY21. We broadly maintain our revenue estimates however, we increase our EBITDA margin estimates by 48/ 50 bps for FY21E/ FY22E factoring Q1FY21 results. We have sizably lowered our depreciation estimates and increase our tax rate and accordingly increased our PAT estimates by 10.9%/ 10.4% for FY21E/ FY22E. Labour availability currently stands at 60% which is expected to increase to 80-85% in 1-2 months.
We expect a 19.2%/ 15.3% revenue/ APAT CAGR over FY20-22E, with EBITDA margins of 17.5% each for FY21E/ FY22E. Considering pick up in execution from Q3FY21E, healthy return ratios, a well-managed balance sheet, comfortable working capital, low D:E, and quality management, we maintain BUY with a SOTP-based TP to Rs337 (15x FY22E EPS and 1.2x PB for HAM + BOT investment). We have excluded KNR Walayar Tollways valuation from our SOTP as KNR is finalizing a deal with Cube Highways.
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