Brokerage firm ICICI Securities in a recent report has suggested investors buying the stocks of GR Infraprojects (GRIL). The report mentioned that the company has guided for Rs. 15,000 crore of order inflows during FY23 largely targeting Roads (Rs. 10,000 – Rs. 12,000 crore), and railways and power transmission (Rs. 3,000 – Rs. 5,000 crore) segments.

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GR Infraprojects: Target Price, Current Market Price, Market-Cap

GR Infraprojects: Target Price, Current Market Price, Market-Cap

The Current Market Price (CMP) of GR Infraprojects (GRIL) is Rs. 1402. ICICI Securities has estimated a Target Price for the stock at Rs. 1690. Stock is anticipated to give a 21% return, in 1 year. The company is a mid-cap company with a market capitalization of Rs. 13,797 crore.

Stock Outlook  
Current Market Price (CMP) Rs. 1402
Target Price Rs. 1690
Potential 1 year return 21.00%
52 week high share price Rs. 2,267.65
52 week low share price Rs. 1,249.20

GR Infraprojects (GRIL) has reported a better-than-expected performance, but the company’s standalone revenue has declined 13.7% YoY to Rs. 2,268.1 crore on a relatively higher base. On a QoQ basis, the company reported 24.7% growth. EBITDA margin was at 17.8%, up 221 bps YoY. Effectively, EBITDA at Rs. 403 crore, was down merely by 1.5% YoY. On the other hand, its PAT stood at Rs. 265.2 crore, up 7.2% YoY. At the end of FY22, its gross debt, cash, and cash equivalent at the standalone level stood at Rs. 1,100 crore, Rs. 445 crore, respectively.

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Stock advantages as mentioned by ICICI Securities
 

Stock advantages as mentioned by ICICI Securities

GRIL has guided for around Rs. 200-300 crore of Capex during FY23. According to ICICI Securities, “GRIL is likely to be one of the major recipients of thriving roads and railways segments. Healthy order inflows to aid its order book position. Strong order book position, receipt of appointed date in most of its projects, and execution pick-up to translate into 12.4% topline CAGR over FY22-24E. GRIL has built an efficient business model powered by robust execution skills and delivered strong revenue growth with elevated margins. Its outlook remains bright with a decent order book position, healthy revenue visibility, lean balance sheet structure, comfortable working capital cycle, and strong return ratios. Additionally, better-than-expected order inflows and monetization of HAM assets can act as a positive trigger.”

Commenting on the debt issue, the firm added, “Current order mix with built-in raw material price variation clauses in most of its contracts provides margin sustainability at ~16%. Double-digit return ratios, and lean balance sheet position. We expect its debt to remain at comfortable levels with healthy operating cash flow generation arising from improved profitability and, better cash flow management.”

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About the company: GR Infraprojects (GRIL)

About the company: GR Infraprojects (GRIL)

GR Infraprojects (GRIL) is a leading player in the roads and highways sector having an overall order book size of Rs. 20,210 crore. GRIL’s share price has de-grown by ~24% over the past 1 year, from around Rs. 1,730 in July 2021 to around Rs. 1,402 levels in May 2022. The company has delivered 26.6% revenue CAGR during FY16-22, well complemented by 33.6% EBITDA CAGR and 39% PAT CAGR. GRIL has successfully implemented its strategy to become a leading road contractor, mainly aided by its vast construction experience and consistent enhancement in execution skills backed by continued investment in manpower and machineries, as the report states.

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Disclaimer

Disclaimer

The above stock was picked from the brokerage report of ICICI Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

The Current Market Price (CMP) of GR Infraprojects (GRIL) is Rs. 1402. ICICI Securities has estimated a Target Price for the stock at Rs. 1690. Stock is anticipated to give a 21% return, in 1 year. The company is a mid-cap company with a market capitalization of Rs. 13,797 crore.

GR Infraprojects (GRIL) has reported a better-than-expected performance, but the company’s standalone revenue has declined 13.7% YoY to Rs. 2,268.1 crore on a relatively higher base. On a QoQ basis, the company reported 24.7% growth. EBITDA margin was at 17.8%, up 221 bps YoY. Effectively, EBITDA at Rs. 403 crore, was down merely by 1.5% YoY. On the other hand, its PAT stood at Rs. 265.2 crore, up 7.2% YoY. At the end of FY22, its gross debt, cash, and cash equivalent at the standalone level stood at Rs. 1,100 crore, Rs. 445 crore, respectively.
GRIL has guided for around Rs. 200-300 crore of Capex during FY23. According to ICICI Securities, “GRIL is likely to be one of the major recipients of thriving roads and railways segments. Healthy order inflows to aid its order book position. Strong order book position, receipt of appointed date in most of its projects, and execution pick-up to translate into 12.4% topline CAGR over FY22-24E. GRIL has built an efficient business model powered by robust execution skills and delivered strong revenue growth with elevated margins. Its outlook remains bright with a decent order book position, healthy revenue visibility, lean balance sheet structure, comfortable working capital cycle, and strong return ratios. Additionally, better-than-expected order inflows and monetization of HAM assets can act as a positive trigger.”
Commenting on the debt issue, the firm added, “Current order mix with built-in raw material price variation clauses in most of its contracts provides margin sustainability at ~16%. Double-digit return ratios, and lean balance sheet position. We expect its debt to remain at comfortable levels with healthy operating cash flow generation arising from improved profitability and, better cash flow management.”
GR Infraprojects (GRIL) is a leading player in the roads and highways sector having an overall order book size of Rs. 20,210 crore. GRIL’s share price has de-grown by ~24% over the past 1 year, from around Rs. 1,730 in July 2021 to around Rs. 1,402 levels in May 2022. The company has delivered 26.6% revenue CAGR during FY16-22, well complemented by 33.6% EBITDA CAGR and 39% PAT CAGR. GRIL has successfully implemented its strategy to become a leading road contractor, mainly aided by its vast construction experience and consistent enhancement in execution skills backed by continued investment in manpower and machineries, as the report states.
The above stock was picked from the brokerage report of ICICI Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

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