Motilal Oswal Gives A Buy Rating To GR Infraprojects For A Potential Gain Of 29.96%

Leading brokerage firm Motilal Oswal Financial Services has given a buy call to the GR Infrapojects for a target prices of Rs 1800 in its latest report. GR Infraprojects is one of the fastest growing construction companies in India and has played a key role infrastructure sector. It came into existence in 1995.

Stock overview of GR Infraprojects

The stock of GR Infraprojects opened at 1418 and reached the day's high of 1427.95 and low of 1390, respectively. The current market price of GR Infraprojects is 1396.50 as it lost 1.72% today. The brokerage firm has given GR Infraprojects a target price of Rs 1800. If we take into consideration the CMP of 1396 and Target Price of 1800, investors can expect a potential gain of more than 29%. The share of GR Infraprojects has touched a 52-week high of 2277 and 52-week low of 1249. The stock reached 52-week high on 25 October, 2021 and 52-week low on March 7, 2021.

Improving margins and strong order book

According to Motilal Oswal, GRIL witnessed subdued execution in Q4 FY 22 as a result of delays in obtaining the appointed dates in its projects. The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) registered at 17.8% which included bonus and claims of Rs 821 million. The order book stood at Rs 131 billion.

The order pipeline is robust with GRIL expecting Rs 150 billion of new project wins in FY23. The majority of new orders Rs 120 billion are expected to come from Roads and Highways segment with the balance from Metro and Power. Meanwhile, the revenue fell 14% to Rs 22.7 billion in 4QFY22. The EBITDA margin stood at 17.8% above the estimate of brokerage from of 15.4%. The PAT saw a strong beat and surged 7% YoY to Rs 2.7 billion. The invested Equity into HAM projects stood at Rs 13.3 billion and management expects Rs 21billion of fund infusion during the next three years for all the existing HAM projects.

Valuation of GR Infraprojects

When it comes to the valuation of GRIL Motilal Oswal said, "The recent order inflows have pumped up the order book (now stands at Rs 200 billion including L1) and places GRIL in a comfortable position. The entry into Power T&D segment, with the recent order wins, enhances the potential market opportunity for the company. As many projects in the order book have been won recently and yet to start, we expect muted growth in execution during FY23. Hence, we marginally lower our revenue and earnings estimates to factor in this execution delay. We expect 12% revenue CAGR over FY22-24 with EBITDA margin at 16-17%.

About GR Infraprojects

The company offers infrastructure construction services. It constructs and maintains roads, bridges, highways, culverts, flyovers, and airport runways, among others. GR Infraprojects serves customers in India.

It strives to maintain high standards of precision, punctuality, and quality. It has displayed technical soundness and construction effectiveness in all its deliverables. It seeks to create value for stakeholders. It continues to set new benchmarks of resource utilization and efficiency.