KNR Constructions dips 4%, hits 52-week low on margin concerns

As on March 31, 2022, the company has an order book position of Rs 9,001 crore. With this, KNR has targeted further order book inflow of Rs 4,000 to Rs 5,000 crore for the year FY23.

Shares of KNR Constructions hit 52-week low of Rs 207.80, down 4 per cent on the BSE in Tuesday’s intra-day trade in an otherwise a firm market on margin concerns due to higher commodities prices.

So far in June, the stock of civil construction company fell 20 per cent despite a strong performance in January-March quarter (Q4FY22). In comparison, the S&P BSE Sensex was down 6 per cent, during the same period.

The company recorded 11 per cent year-on-year (YoY) growth in total revenue from Rs 991 crore in Q4FY21 to Rs 1,102 crore in Q4FY22. Meanwhile, EBITDA margin improved to 25.3 per cent from 22.4 per cent, a year ago. Profit after tax, too, grew 49 per cent at Rs 141 crore against Rs 94.7 crore.

KNR’s management said it will try to maintain at least reasonable figure of EBITDA margin, at around 15-16 per cent going forward amid rising commodities prices. From 2021 April level, prices of bitumen have increased approximately from 35 per cent to 40 per cent and steel went up 20-25 per cent.

KNR Constructions is one of the leading companies providing Engineering, Procurement and Construction (EPC) services. The company’s major projects are engaged in roads and highways. It has established presence in irrigation and urban water infrastructure management. As on March 31, 2022, the company had an order book position of Rs 9,001 crore, of which Rs 6,791 crore from road sector and Rs 2,210 crore from irrigation sector.

"The current order book position remains healthy and provides a clear visibility of execution over the period of next 2-1/2 years. The robust project pipeline and ready DPR under the Bharatmala project will accelerate the project awarding activity going forward. With this, we target further order book inflow of Rs 4,000 to Rs 5,000 crore for the year FY23," the management said.

That apart, the income tax department carried out search operations at KNR’s various business premises during the quarter. There has been no formal communication from the department until date. However, the management assured that this would not have any impact on the company’s financial position. Hence, no provision has been made for any liability thereof.