The shares of the leading construction and infrastructure solution gained up to 1 percent after Axis Securities, a well-known brokerage recommended a ‘Buy’ rating.
With a market capitalization of Rs 4,623.16 crore, the shares of J Kumar Infraprojects Ltd were trading at Rs 611.00 per share, increasing around 1.50 percent as compared to the previous closing price of Rs 601.95 apiece.
Looking into J Kumar Infraprojects Ltd’s performance, revenue increased by 14 percent from Rs 1,062 crore in Q3 FY23 to Rs 1,219 crore in Q3 FY24. During the same period, net profit increased by 17 percent, from Rs 71 crore to Rs 83 crore.
Axis Securities, one of the well-known brokerages in India, gave a ‘Buy’ call on the Infra stock with a target price of Rs 800, indicating a potential upside of 31 percent from Wednesday’s price of Rs 611 per share.
Here’s the rationale for the potential upside target:
● As of 31st Dec’23, the company’s orderbook stands at Rs 16,774 Cr, reflecting revenue visibility of 2-2.5 years. The order book is diversified, with 34% belonging to Elevated Corridors & Flyovers, 25% to Roads & Road Tunnels, 16% to Elevated Metros, 13% to Underground Metros, 7% to Water projects, and 5% to Civil & other projects.
● JKIL’s diversity in the infrastructure sector contributes to its durability and stability. The business has risen to become one of the top five EPC contractors for underground metro projects, owing to its continued efforts and experience.
● The brokerage has estimated JKIL to deliver healthy Revenue/EBITDA/PAT growth of 15%/18%/19% CAGR, respectively over FY24-FY26E backed by its strong and diversified order book as well as emerging opportunities.
● With higher order inflows, improved execution prowess, and regional project clustering, the brokerage forecasts the business to maintain and increase its margin profile in the 14.5% – 15.5% area throughout FY24-26E.
● The government has committed to allocating Rs 11 lakh crore on infrastructure in the Interim Union Budget 2024-25, recognizing its critical role in economic growth. In the interim budget 2024-25, the allocations for roads and railways have been increased to Rs 2.78 lakh crore and 2.55 lakh crore, respectively. All of these activities will boost JKIL’s growth.
J Kumar Infraprojects Limited is in the business of executing contracts for different infrastructure projects such as transportation engineering, irrigation projects, civil construction, and pile work.
Written by:- Abhishek Singh
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