Superb show continues for KNRKNRCON - 266 Change: -7.40 (-2.70 %)
News: KNR Constructions' revenue on a standalone basis improved 20.4% YoY to Rs 890.6 crore mainly led by its strong order book position and pick-up in execution. EBITDA margin moderated to 18.5% (down 84 bps YoY; still best in the industry). We believe the performance at the operating level got impacted due to lower contribution from irrigation projects and increase in raw material prices. Effectively, EBITDA at Rs 165 crore, was up 15.1% YoY. At net level, healthy operating performance coupled with benign tax outgo and muted interest cost has translated into 38.1% YoY growth in PAT (to Rs 100.8 crore).
View: Overall, KNR reported a strong performance during Q1FY23 with beat on topline and earnings driven by healthy execution. We currently have a positive outlook on the company considering a) strong execution, b) elevated level of margins, c) best in class working capital cycle, d) monetisation of BOT/HAM assets, e) healthy balance sheet, and f) strong return ratios.