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Centrum Broking Report
KNR Constructions Ltd.'s Q4 FY22 profit after tax at Rs 1.13 billion (up 17% YoY on recurring base) was above estimate of Rs 943 million led by stronger execution/ margins.
Irrigation receivables at Rs 6.5 billion currently (Rs 5.9 billion in February 2022) have remained within this range for several quarters. Also, high margins of ~24% in irrigation build‐in the cost of carrying these receivables.
KNR Constructions' revenue guidance of Rs 35 billion in FY23E (up 7% YoY) is muted despite robust backlog of Rs 98 billion (three times revenue) due to concerns over availability of funding and hence ability to execute irrigation projects (22% of backlog).
We factor revenue of Rs 38.3 billion in FY23 on the back of execution visibility of ~Rs 35 billion from existing highways backlog.
Ebitda margins meanwhile are likely to be in 18‐18.5% range vis‐a‐vis 20.7% in FY22 due to lower irrigation revenue and high input costs.
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