Buy KNR Constructions; target of Rs 304: Prabhudas Lilladher
Prabhudas Lilladher’s research report on KNR Constructions
We believe this development is positive for the company, as it will further strengthen its balance sheet. KNR remains strong in fundamentals backed by strong execution capabilities, healthy operating margins and industry best working capital cycle. KNRC order book stands healthy at ~4x TTM revenues giving us comfortable revenue visibility for next 2-3 years. We expect KNRC to post a revenue/EBITDA CAGR of 19%/9% over FY19-FY22E supported by ramp ups from the existing order book.
We maintain BUY rating with a SOTP of Rs304 which includes ~Rs269 for the standalone EPC business based on 16x FY21E EPS and ~Rs35 for BOT projects based on 1x equity invested. At the CMP, the stock trades at a P/E of 20.3x FY20E and 16.6x FY21E EPS and EV/EBITDA of 10.5x FY20E and 8.8x FY21E EBITDA.
For all recommendations report, 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.
Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.