KNR Construction Share Price

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Highway

    

    Today I will share information about the analysis of KNR construction share (KNRC) and the fundamental analysis of that stock. You may wonder why I am doing a financial top in a civil engineering blog. But keep it this way, It's a construction company so, we are in a better position to analyse it than any other people. If you ask me what you know about finance believe me I am a UPSC aspirant on my days back so I am well versed in all the economics topics and actively involved in buying shares for me. So I think this will be helpful for you people too.

What is KNR Construction (KNRC) Doing?

    KNR Construction (KNRC) is primarily involved in Highway Projects, Irrigation and Water Management, River Bridges and Urban Development in India.

Where is KNR Construction (KNRC) Located?

    KNR Construction, Head Quarters located in Plot No: 113 & 114, Phase 1, Kauri Hills, Jubilee Hills Road No.36, Hyderabad.

History of KNRC

    KNR Construction was incorporated in 1995 in Hyderabad. Over 4 decades it has achieved numerous milestones. They were now operating in across 12 states in India, Such as,

1. Tamilnadu
2. Karnataka
3. Kerela
4. Andhra Pradesh
5. Telangana
6. Madhya Pradesh
7. Uttar Pradesh
8. Assam
9. Gujarat
10. Arunachal Pradesh
11. Orissa
12. Haryana

    They have completed nearly 79 Ongoing projects with a project Value of nearly Rs. 1.61 Million. Currently they have projects in Karnataka(6) , Kerela (2), AP & Telangana(16) and Tamilnadu (5).

Projects

    The majority nearly 50% of their Revenue is from Road Projects so if there is any disruption in Road construction they may hit it hard.

Strong Points of the Company

1. Ontime or Before-time delivery of the project - When it comes to Civil Construction projects. Time is money. Because the more the time taken to complete the project the higher will be the labour cost. since the labour cost will keep increasing with increasing years. But KNRC mostly completed their projects on the scheduled date with little delay in only some projects.
2. Financial Status - According to their Annual Report their turnaround, EBITDA ( Earnings before Interest, Tax, Depreciation and Amortization, PBT (Profit before tax), EPS( Earnings per Share) and Net Worth is Increasing which is very good.
3. Fundamental Metrics - Price to Earnings Ratio (P/E Ratio) is a must while you are selecting a stock, the P/E ratio of KNRC construction is 9.85 which is less than that of the sector P/E which stands at 16.61 which means this company still has the potential to do well in the future.
4. Debt Free - They are claiming that they are debt free.

Weak Points of the Company

1. Insider Selling of Stock - Some People inside the company who hold the shares have sold 6% of their stake which shows a slightly low confidence in the stock. But 6% is still a small number which they could have sold for personal reasons.
2. Free Cash Flow - In 2023, they have free cash flow and at the beginning of 2024, they have a negative free cash flow so we need to make a check on that too.
3. More than its intrinsic Value - The Intrinsic Value of the stock may be nearly 179 to 180 but it is now trading at nearly 350. 

Conclusion

    I Would say KNR Construction's share is a good one in the long run over the years but wait for some time to get it in the right price for some correction until the budget of India is finalized. This may give us an insight on how the Road Infrastructure is going to move further ahead. Accumulate in small amounts if you want. But before you invest please consult with an SEBI-registered professional, the above are all my opinions, not my suggestion. See you soon.

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