KNR Constructions surges 3% on winning Rs 665-crore road project

Shares of KNR Constructions surged 3 percent on March 2 after the company bagged a highway development project worth Rs 665 crore.

At 9:18am, the shares were trading 2.9 percent higher at Rs 265.40 on the BSE.

"The company is in receipt of Letter of Acceptance for development of six lane access controlled greenfield highway from Marripudi (ch. 285+500) to Somvarappadu (ch. 314+600) of [NH-544G] Bengaluru-Vijayawada economic corridor on HAM mode under Bharatmala Pariyojana Phase-1 in the state of Andhra Pradesh," KNR Constructions said in a regulatory filing.

The completion period is 24 months and the operation period of 15 years is from the commercial operation date.

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Axis Securities said that the company’s order book remains robust at Rs 8,100 crore, giving revenue visibility for the next two-three years. "With a healthy NHAI pipeline, we expect the company to receive better order intake which shall drive its revenue growth moving forward."

The company is looking to diversify to other segments such as Railway and Metros to keep the revenue stream unaffected apart from the road segment. Plus, with newer opportunities emerging in various infra-related sectors, further diversification strategy augurs well for the company, added the brokerage firm.

However, Axis Securities cautioned that the absence of major order wins to date in FY23 remains a concern.

ICICI Securities also pointed out a key trigger for the company would be order inflows, which will improve execution visibility ahead.

KNR Constructions operates in the roads and highways sector having executed 6,000+ lane km of projects across 12 states in India. The company also has an established presence in irrigation and urban water infrastructure management.