Fundamental Analysis Of J Kumar Infraprojects: The strength of an economy lies in infrastructure. The economy needs reliable infrastructure to connect not only people but also businesses. The efficient movement of resources, both capital and human, is essential for rapid growth. One such company working in the infrastructural growth of India is J Kumar Infraprojects. In this article, we will conduct a fundamental analysis of J Kumar Infraprojects and understand the future potential of the company. Keep reading to know more!

Fundamental Analysis Of J Kumar Infraprojects

Company Overview

J Kumar Infraprojects logo image

J Kumar Infraprojects was established on December 2, 1999, by Mr. Jagdishkumar M. Gupta and is engaged in the business of executing contracts for various infrastructure projects like Transportation Engineering, Irrigation Projects, Civil Construction, Piling Work, etc. It was initially formed as a proprietorship firm in 1980 with a contract worth Rs 15000.

It has an established presence in the states of Maharashtra, Delhi, Gujarat, Rajasthan, and UP and offers infrastructure services for the metro, flyover, bridges, roads, tunnels, civils, and water.

telegram channel

Some major projects J Kumar Infraprojects completed are the Delhi underground metro, Mumbai metro line 7, Panjarapole Flyover, Grant Road Skywalk, etc. It is currently executing 30+ complex projects with an order book of ₹ 11,854 crores, like Airoli Creek Bridge, Kalwa Bridge Thane, Pune Elevated Metro, Mumbai Metro Line 6, and Dwarka Expressway. 

J Kumar Infraprojects - Investor
Source: Investor Presentation

Segment Analysis

The company’s operations predominantly consist of construction activities within India.

The following chart displays the revenue breakdown for 9MFY24.

Fundamental Analysis Of J Kumar Infraprojects - Investors Presentation

(Source: Investors Presentation)

The order book breakdown of the company:

Investors Presentation

(Source: Investors Presentation)

Industry Overview

According to the Reserve Bank of India, the country will grow by 6.5% in FY24. In India, increased economic activity and a favorable demand environment suggest that the country’s expanding momentum will certainly attract substantial investments and continue growing.

Ports and airports have improved significantly in the last eight years, while roads, railways, and waterways have expanded dramatically. Extending infrastructure facilities is only one piece of the story; modernization is another critical goal that has been actively pursued and quickly achieved. To further assist infrastructure development and creation, the government laid a solid basis with the National Infrastructure Pipeline (NIP) in 2019 and the National Monetization Pipeline (NMP) in 2021, both of which offer a diverse variety of opportunities for international investment and collaboration.

During the fiscal year 20–25, sectors such as energy (24%), highways (19%), urban (17%), and railroads (12%) are expected to account for 72% of the projected infrastructure investments in India, with a total capital expenditure of 111 lakh crores. Out of the entire planned capital expenditure of’111 lakh crores, projects worth’44 lakh crores (40% of NIP) are under execution, projects worth’33 lakh crores (30%) are at the conceptual stage, and projects worth’22 lakh crores (20%) are under development. Thus, we can conclude that the industry has great potential.

J Kumar Infraprojects – Financials 

Let’s look at the financials of J Kumar Infraprojects.

Revenue and Net Profit

J Kumar Infraprojetcs reported Rs 4203 crore in revenue in FY23, a 19% increase in revenue compared to Rs. 3527 crore in FY22. The net profit earned in FY23 increased by 33% compared to FY22, from Rs 206 crore to Rs 274 crore.

Taking a five-year time horizon, revenues and net profits have grown at a CAGR of 10.82% and 11.54%, respectively. A closer look at the data reveals that revenue and profits fell in FY21, mainly due to COVID-19, and then significantly recovered to record the highest revenue in FY23.

By harnessing modern-day equipment and maintaining an owned fleet, they have effectively lowered their operating costs while expediting the turnaround time (TAT) for intricate infrastructure projects. The table below exhibits the revenue and profits of J Kumar Infraprojects over the last 5 years.

Fiscal YearRevenue from operations (In Crores)Net Profit (In Crores)
20234203274
20223527206
2021257164
20202971184
20192787177
4-year CAGR10.82%11.54%

Profit Margins

The financials reported an operating margin of 14.2% and a net profit margin of 6.5% in FY23, compared to 14.3% and 5.8%, respectively, in FY22. From a five-year perspective, operating margins stand at 14.14% and net profit margins at 5.48%.

The operating margins have been more or less stable in the past years, except for FY21, which was due to COVID-19. Net profit margin has improved in the last 2 years, but from a longer perspective, it has been in a similar range. The table below exhibits the profit margins of CDSL over the last 5 years.

Fiscal YearOperating Profit Margin (%)Net Profit Margin (%)
202314.26.5
202214.35.8
202112.12.5
202014.46.2
201915.76.4
5-year average14.145.48

Return Ratios

As for its return ratio, J Kumar’s business generates a healthy return on capital employed. Its RoCE and RoE stood at 17.6% and 12.4%, respectively, in FY23. The RoCE and RoE ratios have increased due to enhanced efficiency and an increase in profitability in the current year. Though RoE is improving, the company has not generated good returns for its shareholders. On a longer perspective, the ratios have also improved and are above their 5-year average of 14.1% and 9.54%, respectively. The table below shows the ROE and RoCE of J Kumar Infraprojects for the last 5 years:

Fiscal YearReturn on Capital Employed (%)Return on Equity (%)
202317.612.4
202215.210.4
20217.83.4
202013.610.4
201916.311.1
5-year average14.19.54

Leverage Ratios

Looking at the company’s leverage status, we can see that it maintains comparatively low debt. Over the last 5 years, the highest recorded debt-to-equity ratio was 0.41 in FY19. This indicates that the company is less financially burdened because it relies less on borrowed capital to fund its operations and expansion. This also means that the company can retain more of its revenue because it has a small commitment to repay debt and interest.

In terms of interest, the company’s interest coverage ratio improved in FY23, which was reported at 4.33. This means the company has generated enough gross profits to cover its interest expenses four times over. The table below shows the D/E and interest coverage ratio of J Kumar Infraprojects for the last 5 years:

Fiscal YearDebt / Equity (Times)Interest Coverage Ratio (Times)
20230.224.33
20220.213.53
20210.261.99
20200.373.39
20190.413.86
5-year average0.33.42

Future Outlook

  • To become a billion-dollar revenue company by 2027
  • Achieve ₹ 20,000+ cr expected order book in FY27.
  • Improve their brand reputation with a portfolio of innovative and impressive projects.
  • Invest continuously in cutting-edge technologies and equipment.
  • To foray into new infra segments.
  • To focus on improving margins and return ratios.

J Kumar Infraprojects – Key Metrics

ParticularsAmountParticularsAmount
CMP₹ 601.8Market Cap(Cr)₹ 4,825.57 Cr
EPS38.49Stock P/E12.84
RoE11.84%RoCE15.5%
Promoter Holdings46.65%FII Holdings9.81%
Debt to Equity0.22P/B1.52
Operating Profit Margin14.20%Net Profit Margin6.50%

Conclusion

As we conclude the article “Fundamental Analysis of J Kumar Infraprojects,” we understand the business, its financials, and its plans. The company has been improving on all fronts. If the company’s earnings continue to increase along with its implementation of the plans it has laid out, it would have good potential to grow. Further analysis to understand the risk and return characteristics and suitability is required before investing. Do let us know your thoughts about this company in the section below.

Written by Ashish Agarwal

By utilizing the stock screenerstock heatmapportfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investments.


Start Your Stock Market Journey Today!

Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!