KNR Construction
Q1 FY25 concall highlights:
Company has total order book of Rs. 6122 cr. They plan to execute the same in next 1.5 yrs. I.e. Rs. 4000 cr revenue in next 1 yr.
FY24 sales was Rs. 4429 cr. This means negligible growth in FY25.
Targeting new orders of 6000 – 8000 cr by FY25 end.
Waiting for NHAI to start ordering. Have order pipeline in Kerala & North-east. Keen to work with Maharashtra MSRDC but since they don’t qualify directly, JV with Patel Infra. have placed bid for Metro with JV partner NCC.
Planning to participate for irrigation projects in MP, Chhattisgarh and also under Jal Shakti Mission projects. Telangana govt also coming up with irrigation project.
Examining mining contracts too. Working on JV.
So far have bidded (tendor pending) for 1-2 projects only. Hoping for new projects to be offered for bidding.
2nd quarter will be disappointing due to rains. 3rd and 4th quarter will be good. Company aiming to touch FY24 sales in FY25 too. So definitely not gonna grow revenue over FY24. (For irrigation segment, targeting revenue of Rs. 200 – Rs. 250 cr for FY25 full year)
FY26 & FY27 could see limited growth as getting order take time and then starting executing is also time consuming.
They are largely into subcontracting. Main developer gets the contract from authority and subcontract the manufacturing part to KNR. In Joint bidding too, they look after EPC. However for some HAM projects, they do all on their own.
Targeting Rs. 1200 cr orders from Andhra Pradesh during current year.
Targeting overall EBIDTA margin of 15-16% for FY25 and FY26.
Appointment Date for 2 projects (KNR being lowest bidder) is delayed amounting to Rs. 1200 cr. Delay due to land acquisition. in 1 project 82% acquired, in another project 70% acquired. Should get AD by Sept-end or Oct.
Capex of Rs. 10 cr during Q1. Might do 80 – 100 cr during rest of the year.
looking to monetize 4 assets by Sept-25 to keep business asset-light. Looking for 1 buyer to take all 4 assets.
KNR has net profit margin on ~17%. Ashoka has ~8-10%. Ashoka has use debt (D/E 2.6). KNR D/E is 0.4.
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