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Dolat Capital Report
KNR Constructions Ltd. posted results below estimates.
KNR Constructions reported +9.1%/ -5.6%/ -2.9% YoY in revenue/ Ebitda/adjusted profit after tax to Rs 9.1 billion/ Rs 1.5 billion/ Rs 850 million in Q3 FY24.
Reported Ebitda margin down by 252 bps YoY to 16.3% primarily due to higher material cost, spreading and assortment expenses, other expenses, employee cost and sub-contract cost.
We expect revenue/ adjusted profit after tax compound annual growth rate of 6.2%/ 3.8% over FY23-26E, with Ebitda margin of 18.3%/ 18.2%/ 17.5% for FY24E/ FY25E/ FY26E.
We decrease EPS by 3.2% for FY24E factoring lower Ebitda margin. However, maintain earnings per share for FY25E/ FY26E. Current market price leaves limited upside. Thus, we maintain Accumulate with a SOTP-based revised target price of Rs 285 (14 times FY26E EPS and 1.2 times price/book for hybrid annuity model investment).
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