Buy G R Infraprojects, target price Rs 1600: Axis Securities

Axis Securities has buy call on G R Infraprojects with a target price of Rs 1600. The current market price of G R Infraprojects is Rs 1143.2.

G R Infraprojects Ltd., incorporated in the year 1995, is a Small Cap company (having a market cap of Rs 11046.24 Crore) operating in Construction sector.

G R Infraprojects Ltd. key Products/Revenue Segments include Income From Construction Work, Electricity, Sale of services, Scrap and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 2161.65 Crore, down -20.11 % from last quarter Total Income of Rs 2705.91 Crore and up 13.76 % from last year same quarter Total Income of Rs 1900.26 Crore. Company reported net profit after tax of Rs 336.23 Crore in latest quarter.

Investment Rationale
GR Infraprojects Ltd(GRIL)reported a weak set of numbers in Q2FY23.The company reported revenue of Rs1,777Cr(below estimate), up5% YoY. It posted EBIDTA of Rs260Cr (below estimate),down6% YoY, and APAT of Rs164Cr (below estimate),up1% YoY. The company registered EBITDA Margins of14.6%in Q2FY23(our estimate:15.3%) as against 16.4% in Q2FY22. The company reported APAT margins of 9.25% against 9.59% in Q2FY22.There has been an increase in other income due to the bonus received. The company’s EBITDA margin was impacted owing to cost inflation, additional provisions, and CSR expenditure during the quarter. With a robust bidding pipeline in EPC and HAM projects along with railways and T&D, we believe GRIL is well-placed to capture growth opportunities in the sector. With a robust order book and proven execution prowess, the brokerage expects the company to post Revenues/EBITDA/PAT growth of 11%/12%/14%CAGR respectively over FY22-24E. It retains a BUY rating on the stock with a target price of Rs1,600/share, implying an upside of 37% from the CMP.

Promoter/FII Holdings
Promoters held 79.74 per cent stake in the company as of 30-Sep-2022, while FIIs owned 0.23 per cent, DIIs 15.67 per cent.