KNR Construction Q1 Review – Good Quarter; Execution Run-Rate To Slow Down In Near Term: Nirmal Bang

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KNR Construction Ltd. reported good set of numbers for Q1 FY23, with 20%/15%/38% YoY growth in revenue/Ebitda/profit after tax.

Better execution in both irrigation and roads segments resulted in better earnings. Revenue/Ebitda were 7.5%/7.6% ahead of our estimates while profit after tax was 26.7% ahead of our estimate on account of lower depreciation and tax outgo.

Ebitda margin at 18.5% was in line with our estimate and down 80 bps YoY. While the debtor days declined from 95 days in March 2022 to 70 days in June 2022, the receivables from the irrigation segment increased on a QoQ basis.

Payments from the Irrigation segment have slowed down and hence we expect the execution run-rate in this segment to moderate going forward.

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