Accumulate KNR Constructions; target of Rs 348: Kotak Securities

Kotak Securities’ research report on KNR Constructions

We recently visited KNRs Pollachi to Coimbatore EPC project where we interacted with the top management of the company. The company is positive on its construction business in the longer run and believes that traction in order inflows in Q4FY18 and robust pipeline of projects gives strong revenue growth visibility for the next 2-3 years. KNR added four HAM projects with bid project cost of Rs 44.7 bn in Q4FY18 and is confident of achieving financial closure of these projects.

Outlook

We maintain our earnings estimates. The construction business of the company is available at FY20E PE of 16.7x. We recommend ACCUMULATE (from Buy earlier) and maintain target price of Rs 348 based on SOTP valuation.

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