Company Details

KNR Constructions is a medium sized company in the field of surface transport infrastructure.

It specializes in construction of Expressways, National Highways, Rural roads, Flyovers and

Commercial/Residential projects on EPC and BOT basis. KNR has around 20 years of

experience in project execution and has executed about 5400 lane km road projects spread

across 12 states in India.

KNRCL’s strength lies in its ability to provide Engineering, Procurement and Construction

(EPC) services across various fast growing sectors namely construction and maintenance of

roads, highways, flyovers and bridges. The Company has forayed into infrastructure projects

independently as well as through collaborations. Partnering with similar like-minded

companies has enabled KNRCL to undertake high-value projects and increase its geographic

presence. While establishing a commanding presence in southern India especially in Andhra

Pradesh, Karnataka, Kerala and Tamil Nadu in recent years, KNRCL has also diversified into

new markets such as Bihar, U.P ,Madhya Pradesh and Chhattisgarh. Its clientele in the road

segment includes National Highway Authority of India (NHAI), state governments and private

companies. Irrigation and water management projects are from state governments.

The current market capitalization stands at Rs 885.89 crore. The company has reported a

standalone sales of Rs 170.21 crore and a Net Profit of Rs 13.95 crore for the quarter ended

Sep 2014.

Category No. of Shares Percentage

Promoters 18,925,241 67.29

NBFC and

Mutual Funds4,835,146 17.19

General Public 2,826,539 10.05

Other

Companies1,036,833 3.69

Foreign

Institutions300,000 1.07

Others 136,011 0.48

Foreign - NRI 63,690 0.23

Market Cap (Rs Cr) – 888.7

Company P/E – 11.82

Industry P/E – 26.59

Book Value (Rs) – 182.52

Dividend (%) – 10

EPS (TTM) – 26.72

Dividend Yield (%) – 0.32

Face Value (Rs) - 10

Share Holding Pattern Financial Details

Industry Details

India’s construction sector is forecast to grow at 7-8 percent each year over the next decade

following the election of a new government. The country will see increased economic growth,

and the removal of barriers to foreign investment will “spur demand for construction” over the

coming 12 to 18 months, says PricewaterhouseCoopers India report.

“With a new government having been formed at the Centre, with a strong mandate to stimulate

economic growth, the outlook for the sector appears positive,” it says. An estimated US$1

trillion is being spent on infrastructure over the five years to 2017 and there is increased

investment in industrial projects by the government. But it is the private housing sector that the

PwC report highlights as a key growth area.

“Demand for real estate has been one of the drivers of construction sector growth over the last

10 year. Improvement in economic conditions has the potential to drive demand for real estate,

as housing continues to be a favored investment asset among Indian households. Stating that

there would be increased investment in industrial projects by the government, the report has

noted that it is the private housing sector that would be a key growth area.

The total construction market in India for fiscal year ending March 2014 was $157 billion, an

increase of $4 billion over FY2013. Infrastructure accounts for 49 per cent, housing and real

estate for 42 per cent and industrial projects for 9 per cent, the report noted.

Balance Sheet

Sources Of FundsMar '14 Mar '13 Mar '12 Mar '11 Mar '10

Total Share Capital 28.12 28.12 28.12 28.12

Equity Share Capital 28.12 28.12 28.12 28.12

Reserves 582.83 435.57 389.66 345.93 294.54

Networth 610.95 463.69 417.78 374.05 322.66

Secured Loans 376.63 142.16 49.85 179.22 155.75

Unsecured Loans 16.50 1.81 3.08 0.15 0.59

Total Debt 393.13 143.97 52.93 179.37 156.34

Minority Interest 55.95 53.40 1.09 1.02 1.00

Total Liabilities 1,060.03 661.06 471.80 554.44 480.00

Application Of Funds

Gross Block 535.23 514.49 505.90 452.61 346.25

Less: Accum. Depreciation 263.02 218.35 184.60 145.28 103.07

Net Block 272.21 296.14 321.30 307.33 243.18

Capital Work in Progress 585.33 109.78 1.18 11.18 11.02

Investments 25.62 48.89 32.99 35.33 34.05

Inventories 53.02 47.27 64.32 45.90 36.94

Sundry Debtors 75.46 115.94 88.33 144.99 191.14

Cash and Bank Balance 57.29 23.37 11.61 45.75 12.53

Total Current Assets 185.77 186.58 164.26 236.64 240.61

Loans and Advances 385.51 485.37 348.18 297.16 329.98

Fixed Deposits 0.00 0.00 0.00 0.00 41.43

Total CA, Loans & Advances 571.28 671.95 512.44 533.80 612.02

Current Liabilities 337.05 352.40 291.90 270.23 352.87

Provisions 57.36 113.30 104.19 68.30 73.62

Total CL & Provisions 394.41 465.70 396.09 338.53 426.49

Net Current Assets 176.87 206.25 116.35 195.27 185.53

Miscellaneous Expenses 0.00 0.00 0.00 5.35 6.24

Total Assets 1,060.03 661.06 471.82 554.46 480.02

Book Value (Rs) 217.24 164.88 148.55 133.01 114.73

Profit and Loss Account

IncomeMar '14 Mar '13 Mar '12 Mar '11 Mar '10

Sales Turnover 895.03 764.97 892.23 1,051.70 899.45

Net Sales 895.03 764.97 892.23 1,051.70 899.45

Other Income 17.18 18.47 11.11 2.73 6.69

Stock Adjustments 1.94 -2.04 15.30 2.51 -9.88

Total Income 914.15 781.40 918.64 1,056.94 896.26

Expenditure

Raw Materials 290.67 203.00 320.46 233.04 0.00

Power & Fuel Cost 0.00 1.80 0.00 0.00 0.00

Employee Cost 35.21 29.57 30.18 23.09 21.09

Other Manufacturing Expenses 418.74 0.00 401.54 629.14 729.65

Selling and Admin Expenses 0.00 0.00 0.00 0.00 11.09

Miscellaneous Expenses 20.98 411.93 23.06 19.29 1.79

Total Expenses 765.60 646.30 775.24 904.56 763.62

Operating Profit 131.37 116.63 132.29 149.65 125.95

PBDIT 148.55 135.10 143.40 152.38 132.64

Interest 17.89 12.08 11.81 9.71 13.99

PBDT 130.66 123.02 131.59 142.67 118.65

Depreciation 58.58 55.96 55.60 46.18 32.02

Profit Before Tax 72.08 67.06 75.99 95.60 85.74

Extra-ordinary items 0.00 0.00 0.00 -6.24 0.90

PBT (Post Extra-ord Items) 72.08 67.06 75.99 89.36 86.64

Tax 6.54 15.73 26.84 32.66 30.41

Reported Net Profit 65.54 51.35 49.15 56.71 56.24

Share Of P/L Of Associates 5.09 2.28 2.35 -1.24 -9.60

Net P/L After Minority Interest & Share Of Associates 60.46 49.07 46.81 64.22 65.05

Total Value Addition 474.93 443.30 454.78 671.52 763.62

Equity Dividend 2.81 2.81 2.81 5.62 5.62

Dividend History

Index and Company Comparison

Company Forecast

HDFC Mid-Cap Opportunities Fund

Franklin India Smaller Companies Fund

ICICI Pru Infrastructure Fund

Tata Infrastructure Fund

Tata Equity P/E Fund

Days BSE NSE

30 304.39 304.36

50 294.51 294.69

150 247.49 247.69

200 209.48 209.50

PBIT – 7.97 v/s 7.74

ROCE – 8.96 v/s 13.02

Net Profit Margin – 6.62 v/s 6.26

Return on net worth – 9.89 v/s 10.58

Reserves – 583.83 cr v/s 435.57 cr

PAT – 65.54 cr v/s 51.35 cr

Total assets – 1060.03 cr v/s 661.06 cr

Net sales – 895.03 cr v/s 764.97cr

Book Value – 217.24 v/s 164.88

Simple Moving Average

Mutual Fund Holdings

Important Ratios

Recommendations

Buy KNR Constructions at current or lower market levels

Reasons for the recommendations are :

Sound financial position of the company

Low working capital cycle when compared with competitors

Starting of collection of toll in many of their projects

Strong record of timely project completion

Less debt when compared with peers

Governments focus on developing infrastructure

Less Non Performing Assets