GR Infraprojects Q2 Results Review - Muted FY25; Order Inflow Must For FY26/FY27 Growth: Dolat Capital

Dolat Capital Report

GR Infraprojects Ltd.'s Q2 FY25 results were much below estimates with a multiyear low quarterly revenue and Ebitda margin.

We expect revenue/adjusted profit after tax compound annual growth rate of 8.0%/9.2% over FY24-27E with Ebitda margins of 12.4%/12.9%/13.1% for FY25E/ FY26E/FY27E.

We decrease our FY25E/FY26E EPS estimates by 13.3%/11.9%, post factoring lower revenue growth for FY25E and slightly lower margin. We also introduce FY27E. We expect muted revenue growth for H2 FY25E most likely to pick up in FY26E, post factoring higher order inflow (Rs 180 billion/Rs 150 billion in FY25E/FY26E); sizable order inflow is a must for FY26E/FY27E growth.

Despite factoring higher revenue growth versus company guidance, the current current market price already factors in all positives incl. increase in order inflow. Accordingly, we maintain our ‘Sell’ rating with revised SOTP-based target price of Rs 1,576 (12 times FY27E EPS + 1x price/book for hybrid annuity model assets).

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