The shares of a leading construction and infrastructure development company hit a 52-week-high after a well-known brokerage recommended a ‘buy’ rating.
With a market capitalization of Rs 4,488.48 crores, the shares of J Kumar Infraprojects Ltd closed at Rs 593.20 per share, increasing around 20 percent compared to the previous closing price of Rs 494.35 per share.
Looking into J Kumar Infraprojects Ltd’s performance, revenue increased by 10 percent from Rs 1,013 crore in Q2 FY23 to Rs 1,104 crore in Q2 FY24. During the same period, net profit increased by 7.3 percent, from Rs 68 crore to Rs 73 crore.
Credit Lyonnais Securities Asia (CLSA), Asia’s well-known brokerage, issued a ‘Buy’ call on the infrastructure stock with a target price of Rs 720, indicating a potential upside of 46 percent from Friday’s closing price of Rs 494.35 per share, but 22 percent upside potential from Tuesday’s closing price of Rs 593.20 per share.
Here is the reason behind the bullish upside target:
● So far in fiscal year 2024, J Kumar Infra has received robust urbanization orders, with its order backlog increasing by 114% over the previous year.
● The order inflow grew 16 times year-on-year in the second quarter of FY24 on receiving multiple large orders while its backlog grew 44% year-on-year, the research firm noted.
● The company has bagged orders worth Rs 7,600 crores and is L1 in orders worth Rs 1,300 crores this fiscal, and the company will hit an order book worth Rs 25,000 crores by the financial year 2027.
● According to the brokerage CLSA, the firm has also profited from urbanization investments to decongest cities and reduce vehicle emissions.
The business is now implementing 30-plus complicated projects with an order book of Rs 16,447 crores and has secured the highest-ever contract for Rs 7,188 crores in FY 24 so far.
J Kumar Infraprojects Limited is in the business of contract execution for different infrastructure projects such as transportation engineering, irrigation projects, civil construction, and piling work, among others.
Written by:- Abhishek Singh
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