In the past three months, the shares of KNR Constructions have experienced a 3 percent decline, and over the past year, they have dropped by 2 percent. Despite the lackluster performance in Q4 and a less-than-exciting share price, analysts remain optimistic.
KNR Constructions, a Hyderabad-based engineering, procurement, and construction company, primarily focuses on road and highway projects while also having a presence in irrigation and urban water infrastructure management.
The company reported consolidated net sales of Rs 1,245.33 crore in the quarter ending March, marking a 13 percent year-on-year increase. Net profit also rose from Rs 139.16 crore to Rs 147.27 crore compared to the previous year.
Despite facing intense competition and some delays in bidding opportunities in the short term, KNR Constructions maintains a robust order book of approximately Rs 8,900 crore. The company secured new orders worth around Rs 2,000 crore in the fourth quarter of FY23 and anticipates new project wins of Rs 4,000-5,000 crore in FY24. It is actively exploring opportunities in sectors such as railways, metros, and urban development projects, with a focus on diversifying its revenue stream beyond roads.
Analysts remain positive about the company's prospects, citing the strong tender pipeline in the road sector, potential for expansion into other segments, and government investments in infrastructure, particularly in roads and highways. They have retained "buy" ratings on the stock, with target prices ranging from Rs 301 to Rs 325.
With the government's increased capital expenditure outlay for the roads and highways sector in Budget 2023-24, KNR Constructions is well positioned to benefit from the infrastructure investments.