Buy KNR Construct;target of Rs 706: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss's research report on KNR ConstructKNR Constructions’ (KNR) Q3FY16 top line at INR2.2bn was up only 2% YoY as execution pick up on new projects was delayed due to land acquisition/flood related issues. Profitability was boosted by ~INR148mn claims, adjusted for which EBITDA margins stood at a healthy 15.6%. Lower tax rate due to Sec 80 (IA) benefits resulted in PAT surging 120% YoY to INR328mn. KNR’s order book at ~INR35bn (4x TTM revenues) provides robust revenue visibility. Buoyant order inflow prospects along with strong execution skills render KNR one of the best bets in the EPC space. Maintain ‘BUY’ with SOTP‐based target price of INR706 as we roll over to FY18E. A strong balance sheet, healthy order inflow prospects, best‐in‐class execution skills place KNR in a sweet spot to benefit from upcoming opportunities in the road segment. We maintain 'BUY' with SOTP‐based target price of INR706 (INR581 from EPC business at 15x FY18E P/E and rest from DCF valuation of BOT projects). For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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