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KNRCON - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.8
📊 Financial Overview
- Profitability: PAT declined from ₹75.2 Cr to ₹51.3 Cr QoQ, showing a 61.7% drop, but EPS remains healthy at ₹22.9.
- Return Metrics: ROE at 20.5% and ROCE at 27.4% are excellent, indicating strong capital efficiency.
- Valuation: P/E of 7.95 is significantly below industry average (22.1), suggesting undervaluation.
- P/B Ratio: With a book value of ₹140 and price of ₹182, P/B is ~1.3, indicating fair intrinsic value.
- PEG Ratio: 0.30 reflects attractive growth-adjusted valuation.
- Debt Profile: Debt-to-equity ratio of 0.00 shows excellent financial discipline and zero leverage.
- Momentum: RSI at 34.6 and MACD at -3.33 suggest oversold conditions and potential for technical rebound.
🏢 Business Model & Competitive Edge
- KNR Constructions operates in infrastructure development, primarily roads and highways, with strong execution capabilities.
- Asset-light model and focus on EPC contracts help maintain lean operations and high margins.
- Government push for infrastructure and road development supports long-term growth visibility.
💡 Entry Zone Recommendation
- Current price is below both DMA 50 (₹196) and DMA 200 (₹226), indicating a bearish trend.
- Suggested Entry Zone: ₹175–₹185 for accumulation.
- Long-term holding is favorable given strong fundamentals and sectoral tailwinds.
✅ Positive
- Strong ROE and ROCE reflect efficient capital deployment.
- Zero debt enhances financial flexibility and reduces risk.
- Low P/E and PEG ratios suggest undervaluation with growth potential.
⚠️ Limitation
- Significant QoQ PAT decline (-61.7%) raises concerns about earnings volatility.
- Decline in DII holdings (-3.59%) indicates cautious domestic sentiment.
- Low dividend yield (0.14%) may not appeal to income-focused investors.
📉 Company Negative News
- Stock has corrected ~49% from its 52-week high of ₹359.
- Weak momentum indicators and below-average trading volume.
📈 Company Positive News
- FII holdings increased by 0.46%, showing renewed foreign interest.
- Strong execution track record and government infrastructure push support long-term growth.
🏭 Industry
- Infrastructure sector benefits from government spending and long-term development plans.
- Industry P/E of 22.1 highlights KNRCON’s relative undervaluation.
🧾 Conclusion
- KNR Constructions is a fundamentally strong infrastructure player with attractive valuation and zero debt.
- Entry near ₹175–₹185 offers a favorable long-term opportunity.
- Monitor earnings recovery and institutional flows for sustained performance.
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