KNRCON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | KNRCON | Market Cap | 4,019 Cr. | Current Price | 143 ₹ | High / Low | 328 ₹ |
| Stock P/E | 11.9 | Book Value | 143 ₹ | Dividend Yield | 0.17 % | ROCE | 27.4 % |
| ROE | 20.5 % | Face Value | 2.00 ₹ | DMA 50 | 160 ₹ | DMA 200 | 198 ₹ |
| Chg in FII Hold | -0.14 % | Chg in DII Hold | -1.49 % | PAT Qtr | 27.9 Cr. | PAT Prev Qtr | 51.3 Cr. |
| RSI | 37.0 | MACD | -4.47 | Volume | 11,34,907 | Avg Vol 1Wk | 11,01,386 |
| Low price | 140 ₹ | High price | 328 ₹ | PEG Ratio | 0.46 | Debt to equity | 0.02 |
| 52w Index | 1.72 % | Qtr Profit Var | -91.9 % | EPS | 12.0 ₹ | Industry PE | 17.6 |
📊 Core Financials: KNR Constructions reported quarterly PAT of ₹27.9 Cr compared to ₹51.3 Cr previously, reflecting a steep decline (-91.9% variation). ROE at 20.5% and ROCE at 27.4% are strong, indicating efficient capital utilization despite profit weakness. Debt-to-equity ratio of 0.02 shows negligible leverage, supporting financial stability. EPS of ₹12.0 provides earnings visibility, though margins remain under pressure.
💹 Valuation Indicators: Current P/E of 11.9 is below the industry average of 17.6, suggesting undervaluation. P/B ratio (Price ₹143 / Book Value ₹143 ≈ 1.0) indicates fair valuation. PEG ratio of 0.46 highlights reasonable growth prospects relative to valuation. Dividend yield of 0.17% offers minimal income support. Intrinsic value appears higher than current price, offering margin of safety.
🏗️ Business Model & Competitive Advantage: KNR Constructions operates in infrastructure development, focusing on roads, highways, and irrigation projects. Its competitive advantage lies in execution capabilities, government contracts, and strong project pipeline. However, earnings volatility and dependence on government spending remain challenges.
📈 Entry Zone Recommendation: With DMA 50 at ₹160 and DMA 200 at ₹198, the stock is trading below averages, reflecting weakness. RSI at 37.0 suggests oversold conditions. An attractive entry zone would be ₹135–₹145, near its 52-week low of ₹140. Long-term holding is viable if earnings stabilize and infrastructure demand sustains.
Positive
- 📌 Strong ROE (20.5%) and ROCE (27.4%)
- 📌 Very low debt-to-equity ratio of 0.02
- 📌 EPS of ₹12.0 supports earnings visibility
- 📌 P/E of 11.9 below industry average
Limitation
- ⚠️ Quarterly PAT declined sharply (-91.9%)
- ⚠️ Dividend yield of 0.17% is negligible
- ⚠️ Stock trading below DMA averages, showing weakness
- ⚠️ Earnings volatility tied to government contracts
Company Negative News
- 📉 PAT fell from ₹51.3 Cr to ₹27.9 Cr
- 📉 FII holdings decreased by 0.14%
- 📉 DII holdings decreased by 1.49%
- 📉 MACD at -4.47 indicates bearish momentum
Company Positive News
- 📈 Strong ROE and ROCE despite profit decline
- 📈 RSI at 37.0 suggests potential rebound from oversold levels
- 📈 Trading volume stable near weekly average
Industry
- 🏗️ Industry PE at 17.6, higher than KNR Constructions’ 11.9
- 🏗️ Infrastructure sector benefits from government spending and urbanization
- 🏗️ Sector faces challenges from project delays and funding constraints
Conclusion
🔎 KNR Constructions is undervalued relative to peers, with strong ROE/ROCE and low debt providing resilience. However, steep profit decline and earnings volatility limit attractiveness. Investors may consider entry around ₹135–₹145 for better value. Long-term holding is justified if earnings stabilize and infrastructure demand remains strong.