KNR Constructions Q2 Results Review - Order Inflow Must To Sustain Growth: Dolat Capital

Dolat Capital Report

KNR Construction Ltd.’s Q2FY25 core Revenue/EBITDA/APAT were above estimates, however, the Ebitda margin was in line.

We expect core revenue/adjusted profit after tax compound annual growth rate of 6.8%/7.6% over FY24-27E with core Ebitda margins of 16.7%/17.3%/17.3% for FY25E/FY26E/ FY27E.

We decrease FY25E EPS by 9.0% post-factoring lower execution in H1 FY25. For FY26E, we maintain EPS estimates and introduce FY27E. The stock has been corrected by ~10% since our result update note on August 16, 2024. Accordingly, we revise our rating to ‘Reduce’ from Sell with a revised SOTP-based target price of Rs 308 (13 times FY27E EPS and 1.2 times P/B for hybrid annuity model investment).

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