Infra-Road Q4 Results Preview - Better Execution Drives Growth; Outlook Remains Positive: Axis Securities

Axis Securities Report

We expect road construction companies under our coverage to report revenue/Ebitda/adjused profit after tax growth of 21%/22%/26% QoQ and 9%/5%/6% YoY, led by superior execution, supporting higher profitability during the quarter.

Q4 is generally a strong period for project execution. Moreover, with bidding and awarding activity accelerating during this period, project awarding by the National Highway Authority of India gained momentum as it awarded 4,300 km of the project till Feb-23 against 1,550 km in the first eight months of FY23.

Since H1 FY23 was soft in terms of project awarding, the NHAI increased the pace to meet its targeted project awarding of 6,500 km in FY23.

Most companies under our coverage have received a letter of award from the NHAI as it accelerated the pace of awarding. In terms of construction, NHAI is looking to construct 5,000 km of roads in FY23 and total construction till Feb-23 stood at 3,200 km.

The order book of our coverage universe has further strengthened with the addition of these recent awards, providing us with revenue visibility for the next two-three years. Further many companies have also diversified and won projects in non road segment thereby strengthening their revenue profile. We expect execution to remain robust moving forward.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.