Domestic brokerage and research firm Axis Securities has set a target price of Rs 1,775 per share for GR Infraprojects.
GR InfraprojectsShares of construction and engineering firm GR Infraprojects have performed well since listing last year. The company’s shares have seen a jump of 72% so far from the upper price band of the IPO. Domestic brokerage and research firm Axis Securities expects further rise in this. The brokerage firm has set a target price of Rs 1,775 per share for this, which is about 21% above today’s opening price (Rs 1,440 per share). The brokerage firm expects GR Infraprojects to do well in the construction space in the times to come.
21 percent expected growth
GR Infraprojects is an Integrated Road EPC Company with experience in Design and Construction of various Road/Highway Projects across 15 states in India. Axis Securities said that the construction industry is expected to strengthen due to high government spending. “We expect the industry to grow at a CAGR of 6% in FY20-FY25,” he said. The brokerage firm believes that GR Infra’s higher order book, better execution and favorable industry tailwinds will drive the overall growth of the company. The brokered firm has given it a Buy rating. He further added, “We value its EPC business at 15xFY24E EPS and HAM portfolio at 1x book value to reach the target price of Rs 1,775/share.”
Along with GR Infraprojects, Axis Securities has also given Buy rating to its peers such as KNR Construction, PNC Infratech, HG Infra Engineering and PSP Projects.
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strong order book
GR Infraprojects has a strong and diversified order book position which is expected to see a sustainable revenue growth over the next 2 years. “The government’s focus on road infrastructure along with a strong order book of Rs 16,692 crore augurs well for the company,” Axis Securities said. The order book of the firm has grown at a CAGR of 24% during FY17-FY21 and the management expects stronger orders going forward.
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better track record
GR Infraprojects has more than 25 years of experience in the road sector. Axis Securities said that since 2006, GR Infraprojects has successfully completed over 100 road construction projects spread across 15 states. Presently the company is working on 27 projects. “Owing to its strong execution credentials and its financial and technical qualifications, GRIL is able to bid on large projects and the company can bid for single projects up to a ticket size of Rs 10,000 crore,” he added.
(Article: Kshitij Bhargava)
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