KNR Constructions (KNR) Shares Surge 11%, Achieving New 52-Week High on Robust Q4 Earnings

• Shares of KNR Constructions, one of the leading companies providing engineering, procurement, and construction (EPC) services, gained 10.6% in today’s intraday trade, reaching a new 52-week high of ₹309.80 per share.
• This surge followed the company’s healthy performance in the March-ending quarter and for the full fiscal year (FY24). Today’s rally has pushed the stock to gain 23% in 2 months.
• “The company’s robust financial performance and recent project wins have significantly boosted investor confidence,” said a market analyst.

KNR Constructions shares climb 11% to hit new 52-week high on healthy Q4 earnings.

Strong Financial Performance in Q4FY24

On Wednesday, the company reported a consolidated profit after tax of ₹341 crore, a solid increase from ₹141 crore in Q4FY23, marking a 140% rise year-over-year and a 151% increase compared to the preceding quarter’s net profit of ₹135 crore.

Revenue Growth and Order Book Expansion

Revenue from operations during the reporting quarter rose to ₹1,414 crore from ₹1,245 crore in Q4FY23. For the full fiscal year, revenues increased to ₹4,429 crore, a 9% improvement compared to ₹4,062 crore in FY23. The net profit for the fiscal year reached a record high of ₹752 crore, reflecting a 71% growth compared to ₹439 crore in FY23.

Significant Project Wins

During the March quarter, the company received an award for water supply projects in 26 ULBs and sewerage projects in 4 ULBs under AMRUT 2.0, within the jurisdiction of Nalgonda and Khammam PH Divisions (Package–II). The letter of award was issued on March 12, 2024, with a project cost of ₹1,163 crore.

Order Book Composition

As of March 31, 2024, the company’s order book stood at ₹5,304.8 crore. It recently secured orders for the construction of an access-controlled four-lane road with a paved shoulder from Mysore to Kushalnagara Section of NH-275 on Hybrid Annuity Mode under NH(O) in Karnataka (Package IV), worth ₹575 crore, and another segment of the same project (Package V), worth ₹625 crore. Including these projects, the total value of the order book is ₹6,504.8 crore.

Sectoral Opportunities and Government Initiatives

Looking ahead, the road sector presents attractive opportunities as the government aims to construct 23 new national highways by 2025, with the private sector projected to emerge as the primary contributor to road infrastructure development. The expansion of national highways is set to reach 16,000 km in 2023–24, advancing at a pace of 45 km per day. Concurrently, the government aims to provide piped water supply to households in rural areas, targeting a capital expenditure of 12.6 trillion rupees for building water infrastructure.

Conclusion

KNR Constructions is a leading player in the country’s infrastructure sector, focusing on highways, flyovers, bridges, and irrigation projects. The company’s strong financial performance, significant project wins, and a robust order book position it well for future growth. Investors should keep an eye on the company’s progress as it continues to capitalize on sectoral opportunities and government initiatives.