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Buy KNR Constructions for medium- to long-term investments

Firstcall India Equity | 09 Jun, 2016  | Follow Author | Add to my Favourites 
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SYNOPSIS


-  KNR Constructions Limited (KNRCL) operates as an infrastructure development company in India.


-  During Q4 FY16, the company achieved a turnover of Rs. 2958.40 mn as against Rs. 2556.68 mn in Q4 FY15, an increase of 15.71%.


-  During Q4 FY16, Net profit increased by 137.64% to Rs. 579.50 mn from Rs. 243.86 mn in the corresponding quarter ending of previous year.


-  During the quarter, EBIDTA is Rs. 605.03 mn as against Rs. 401.02 mn in the corresponding period of the previous year, up by 50.87%.


-  EPS of the company stood at Rs. 20.61 during the quarter, as against Rs. 8.67 per share over previous year period.


-  EPC Order-book is Rs. 34,635 mn as on 31St March, 2016 comprising of Rs. 34,068 mn in Roads sector and Rs. 567 mn in Irrigation.


-  KNR Constructions is awarded by Chief Engineer (NHDP IV), Ministry of Road Transport Highways, New Delhi, an order worth of Rs. 4149.00 mn.


-  KNR Constructions Ltd, a premier infrastructure development company in Joint Ventures has bagged orders worth of Rs. 9836.90 mn.


-  Revenue from operation of Rs. 9025.47 mn for the year ended March 31, 2016, as against Rs. 8761.31 mn for the year ended March 31, 2015.


-  Net profit for the FY 2015-16 went up 121% to Rs. 1611.23 mn from Rs. 730.12 mn in FY2014-15.


-  Net Sales and PAT of the company are expected to grow at a CAGR of 7% and 31% over 2015 to 2018E, respectively.


OUTLOOK AND CONCLUSION


-  At the current market price of Rs.578.25, the stock P/E ratio is at 9.99 x FY17E and 9.04 x FY18E respectively.


-  Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 57.86 and Rs. 63.99 respectively.


-  Net Sales and PAT of the company are expected to grow at a CAGR of 7% and 31% over 2015 to 2018E, respectively.


-  On the basis of EV/EBITDA, the stock trades at 7.67 x for FY17E and 7.02 x for FY18E.


-  Price to Book Value of the stock is expected to be at 1.86 x and 1.59 x for FY17E and FY18E respectively.


-  Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.



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About Firstcall India Equity

Firstcall India Equity of Firstcall India Equity Advisors Pvt. Limited (FIEA), is a leading financial services provider in India and a SEBI Registered Category-I Merchant Banker. FIEA is a culmination of a credible Equity Research Capabilities, Long Standing Relationship with leading FIIs, DFIs, MFs, Overseas Pension Funds etc. The company’s research caters to the needs of the largest news wire and media houses of the world namely Reuters, Thomson, Capital IQ, Themarkets.com, Emerging Markets Euro money Publications-UK. The Company is among the major players in the Debt and Equity markets.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.




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