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Motilal Oswal Report
By securing ~Rs 20 billion worth of new orders in Q4 FY23, KNR Construction Ltd. enhanced its total order book to ~Rs 100 billion (calculated based on order announced post Q3 FY23).
These orders alleviate concerns about the depleting order book. The order book to bill ratio of KNR Construction now stands at ~three times FY23E, providing strong revenue visibility over the next two years.
For its irrigation projects, KNR Construction is expected to bid cautiously prioritising the execution of its existing pending Irrigation order book and ensuring timely receipt of payments.
Higher allocation to Ministry of Roads (up 36% YoY) in the Union Budget of FY24E, ahead of the upcoming general elections in FY24 is expected to contribute to a strong momentum in project awarding and execution throughout FY24.
The robust tender pipeline in the roads sector is likely to result in decent order inflows in FY24, providing provide enhanced visibility on growth in FY25 and beyond.
Considering KNR Construction's current order book value of ~Rs 100 billion, we expect a 12% revenue compound annual growth rate over FY23-25.
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