KNR Constructions
KNR Construction (Code: 532942) (Rs105.45) is an infrastructure development company that provides
engineering, procurement and construction (EPC) services across various fast growing sectors such as roads and highways, irrigation and urban water infrastructure management. The company has gradually upgraded from pure fixedrate contracts to EPC-based contracts. Its project execution strength primarily lies in road transportation engineering projects, wherein it undertakes construction of technically complex & high value projects including expressways, national highways, state highways, rural roads, flyovers, bridges, viaducts & civic amenities under urban development. It executes infrastructure projects independently as well as through joint ventures (JVs) to leverage on the experience and execution capabilities of both parties, which enable it to bag orders in diverse areas and of higher value. Most of its clients are government bodies like the National Highways Authority of India (NHAI), and the public works departments (PWDs) of several state governments. Apart from owning a huge fleet of specialized and hi-tech construction equipments, it also has three captive quarrying mines, 24 crusher units with a crushing capacity of 700 TPH and 11 batch plants. Recently, the
company completed and commissioned the Rs.592 crore annuity project on the Hyderabad-Nagpur highway which is in the BOT format. It bagged some huge orders in 2011-12 and had an unexecuted order book position of over Rs.3042 crore as on 31st March 2012. In August 2012, it was awarded a DBFOT project with a project cost of Rs.682 crore and grant of Rs.265 crore for four laning of highway NH 47 in Kerala for a concession period of 20 years. As of today, KNR is one of the most under leveraged construction companies with a low debt:equity ratio of 0.12 and is hardly impacted by the prevailing high interest rates. Secondly, it can easily raise loans to fund new projects. To accelerate the growth momentum, the company intends to diversify its scope of activities to include hydel power and pipeline projects as well. It also seeks to bag international projects and has formed a subsidiary in Oman in the Middle East. Further, it is open to experiment with real estate development of commercial, residential and retail projects and is awaiting the right opportunity. As per unconfirmed reports, KNR holds 90-acre freehold land with significant portion in adjacent districts of Hyderabad in Andhra Pradesh, about nine acres in Karnataka, and about half acre near Chennai in Tamil Nadu. It recorded a PAT of Rs.53 crore on total revenue of Rs.750 crore in 2011-12. At a current market cap of Rs.300 crore, the stock is trading arguably cheap. Accumulate at declines.
engineering, procurement and construction (EPC) services across various fast growing sectors such as roads and highways, irrigation and urban water infrastructure management. The company has gradually upgraded from pure fixedrate contracts to EPC-based contracts. Its project execution strength primarily lies in road transportation engineering projects, wherein it undertakes construction of technically complex & high value projects including expressways, national highways, state highways, rural roads, flyovers, bridges, viaducts & civic amenities under urban development. It executes infrastructure projects independently as well as through joint ventures (JVs) to leverage on the experience and execution capabilities of both parties, which enable it to bag orders in diverse areas and of higher value. Most of its clients are government bodies like the National Highways Authority of India (NHAI), and the public works departments (PWDs) of several state governments. Apart from owning a huge fleet of specialized and hi-tech construction equipments, it also has three captive quarrying mines, 24 crusher units with a crushing capacity of 700 TPH and 11 batch plants. Recently, the
company completed and commissioned the Rs.592 crore annuity project on the Hyderabad-Nagpur highway which is in the BOT format. It bagged some huge orders in 2011-12 and had an unexecuted order book position of over Rs.3042 crore as on 31st March 2012. In August 2012, it was awarded a DBFOT project with a project cost of Rs.682 crore and grant of Rs.265 crore for four laning of highway NH 47 in Kerala for a concession period of 20 years. As of today, KNR is one of the most under leveraged construction companies with a low debt:equity ratio of 0.12 and is hardly impacted by the prevailing high interest rates. Secondly, it can easily raise loans to fund new projects. To accelerate the growth momentum, the company intends to diversify its scope of activities to include hydel power and pipeline projects as well. It also seeks to bag international projects and has formed a subsidiary in Oman in the Middle East. Further, it is open to experiment with real estate development of commercial, residential and retail projects and is awaiting the right opportunity. As per unconfirmed reports, KNR holds 90-acre freehold land with significant portion in adjacent districts of Hyderabad in Andhra Pradesh, about nine acres in Karnataka, and about half acre near Chennai in Tamil Nadu. It recorded a PAT of Rs.53 crore on total revenue of Rs.750 crore in 2011-12. At a current market cap of Rs.300 crore, the stock is trading arguably cheap. Accumulate at declines.
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