My biggest fear is the terminal value decline for Krsnaa. Since most of tenders are 5-10 years long, there is no visibility beyond that. Hence, the fair value can be at max 10 PE (because revenue visibility is limited). I know that it might win further tenders & re-bid successfully for expiring tenders but that is just an optionality. In other words, there is no certainty of that happening. The government will grant the tender to the lowest cost bidder. Period. It doesn’t care about who is the most qualified or how good of a job the previous bidder did. Hence, there is no assurance that Krsnaa will be able to match its current 78% win ratio or that it will be able to successfully re-bid for expiring tenders.
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