KNR has track record of beating its guidance. Kotak expects the trend to continue looking at its order pipeline.
KNR Constructions shares gained more than 2 percent intraday Thursday after winning the second Hybrid Annuity Project in Tamil Nadu.
It has bagged its second Hybrid Annuity Project (HAM) with bid project cost of Rs 482.04 crore from National Highways Authority of India.
The project includes work of two laning with paved shoulder of Meensurutti to Chidambaram section of NH-227 under Bhartmala Pariyojana, Phase I (Residual Project under NHDP) in Tamil Nadu with a concession period of 17 years including construction period of 2 years from the appointed date.
KNR Constructions, which is a strong player in road construction in south is focusing on growing its order book by adding new projects in road sector, recently bagged its first Hybrid Annuity project (HAM) from NHAI of value Rs 1,020 crore in Tamil Nadu.
"This is the first major road project bagged by the company in FY18 and would strengthen its order book to around Rs 4,300 crore from Rs 3,330 crore at the end of Q3FY18. The company is also lowest bidder (L1) in another HAM project of Rs 1,170 crore in Karnataka where awarding is expected in near future," Kotak Securities said while maintaining earnings estimates and recommending Buy on the stock (versus Accumulate) with target price of Rs 348, implying 17 percent potential upside.
KNR has strong bid pipeline of road projects in south India particularly in HAM segment and targets to add Rs 2,500-3,000 crore of new orders in FY18.
The company has net cash balance sheet at standalone level and hence it is confident to achieve financial closure of HAM projects. It has maintained its guidance to achieve over Rs 1,800 crore revenue in FY18 and Rs 2,100 crore in FY19, Kotak said.
KNR has track record of beating its guidance. Kotak expects the trend to continue looking at its order pipeline.
At 12:04 hours IST, the stock price was quoting at Rs 294.10, up Rs 2.25, or 0.77 percent on the BSE.
