Shares of this smallcap company fell around 3 percent in Tuesday’s trading session despite receiving LoA for Water supply projects and Sewerage Projects from the Government of Telangana.
With a market capitalization of Rs. 7,429 crores, the shares of KNR Constructions Ltd started Tuesday’s trading session on a flatter note at Rs. 273 compared to its previous close of Rs. 273.60. During the trading session, the shares hit a low of Rs. 260.65, making a loss of around 3 percent and are currently trading at Rs. 266 apiece.
According to the exchange filing, the company received a Letter of Acceptance for Water supply projects in 26 ULBs and Sewerage Projects in 04 ULBs under AMRUT 2.0 under the Jurisdiction of Nalgonda and Khammam PH Division from the Government of Telangana worth Rs. 1,163.03 crores. Furthermore, the construction period is 24 months and the operation and maintenance is 5 years from the completion of the works.
Coming onto the company’s financial statements, the revenue decreased by 4 percent from Rs. 1,038 crores during the September quarter to Rs. 996 crores in the December quarter. In addition, the net profits declined by 5 percent from Rs. 143 crores to Rs. 136 crores during the same period.
As of December 2023, the company has a total order book of Rs. 4,964 crores. It received 42 percent of orders for the Roads (HAM) projects, 31 percent of orders were received from the Irrigation projects and the remaining 11 percent from other projects.
KNR Constructions incurred a capex of around Rs 140 crores during FY23 and is expected to continue with a capex ranging from Rs 130 to 140 crore in FY24. Moreover, the company aims to diversify into segments like Railways, Mining, Tunnel work, and Urban Infrastructure to maintain revenue streams.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 17.06 percent during FY 21-22 to 17.21 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 21.52 percent to 22.78 percent during the same timeframe. Furthermore, the net profit margin increased from 10.16 percent during FY21-22 to 10.82 percent during FY22-23.
Headquartered in Hyderabad, KNR Constructions was incorporated in 1995. The company engaged primarily in the construction of roads, bridges, flyovers and irrigation projects.
Written By Vaibhav Patil
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
