Kotak Securities' research report on KNR Constructions
KNR Constructions, a strong player in road construction in south is focusing on growing its order book by adding new projects in road sector. The company has been awarded first Hybrid Annuity project (HAM) from NHAI of value Rs 10.2 bn in the state of Tamil Nadu. This is the first major road project bagged by the company in FY18E and would strengthen its order book to ~Rs 43 bn from Rs 33.3 bn at the end of Q3FY18.
Outlook
The construction business of the company is available at PE of 17.6x and 15.1x, based on FY19E and FY20E revised EPS of Rs 15 and Rs 17.5 respectively, after adjusting for BOT value of Rs 33 per share. We upgrade our rating on the stock to Buy (from Accumulate) due to recent correction and maintain target price of Rs 348 based on SOTP valuation.For all recommendations report, click here
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