Anand Rathi is bullish on KNR Construction has recommended buy rating on the stock with a target price of Rs 272 in its research report dated June 15, 2020.
Anand Rathi 's research report on KNR Construction
Its penchant to deliver better than expected on execution and margins continued even during the Covid-impacted Q4. More inspiring were pruned gross and net debt, implying management continues to strike a fine balance between the income statement and balance sheet. With its sound strategy intact, we see the Covid-disruption as short-lived, and KNR recovering from this largely unscathed (consequently, better placed). It also appears insulated from an expected near-term slowdown in ordering, thanks to the recently added irrigation orders. Its proven execution capabilities, augmented order backlog and a well-placed balance sheet give us confidence to retain our Buy call.
Outlook
Adjusting for the Covid-impact, FY21e earnings are ~35% lower and raised margin-expectation leaves FY22e earnings up ~4%. At present, the stock (excl. investments) trades at 8.7x FY22e EPS.
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