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KNR Constructions Q1 - Robust Order Book Provides Healthy Revenue Visibility: Axis Securities

KNR Constructions Q1 - Robust Order Book Provides Healthy Revenue Visibility: Axis Securities

<div class="paragraphs"><p>Highway projects carried out by KNR Construction Ltd. (Source: Company website).&nbsp;</p></div>
Highway projects carried out by KNR Construction Ltd. (Source: Company website). 

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Axis Securities Report

KNR Constructions Ltd. reported a healthy set of Q1 FY23 numbers, leveraging its execution capabilities. The company reported revenue of Rs 891 crore, up 20% YoY, Ebitda of Rs 165 crore, up 15% YoY, and adjusted profit after tax of Rs 101 crore, up 38% YoY.

It registered an Ebitda margins of 18.5% in Q1 FY23 (our estimate: 18.7%) against 19.4% in Q1 FY22. Hybrid annuity model projects in the road sector have been the major revenue contributor (40%) in this quarter, 35% by irrigation, 20% by engineering, procurement and construction and 5% back to back sub-contarcting.

KNR Construction has an order book of Rs 8,586 crore (as of June 30 2022), implying revenue visibility of over two-three years.

The road sector is gaining significant traction on account of the central government's proactive push for infrastructure development and incumbents like KNR Constructions are likely to be the key beneficiaries of the structural growth opportunities available in the sector.

Click on the attachment to read the full report:

Axis Securities KNR Constructions-Q1FY23-Result Update.pdf

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