KNRCON - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis: KNR Constructions Ltd. (₹213)

Investment Rating: 4.3

KNRCON combines outstanding profitability metrics and deep-value pricing with recent volatility in earnings. It holds strong potential as a long-term investment but demands scrutiny around near-term cyclicality.

🧮 Fundamental Snapshot

ROCE: 29.2%, ROE: 27.5%

✅ Exceptional capital efficiency — suggests strong project execution and financial discipline.

PEG Ratio: 0.11

✅ Extremely undervalued relative to expected earnings growth — classic sign of a value stock.

Debt-to-Equity: 0.41

Moderate leverage — acceptable in an infra-heavy business, but needs monitoring if debt trends upward.

P/E: 5.36 vs Industry PE: 23.8

Undervalued — could indicate either a turnaround opportunity or market skepticism.

📉 Concerns & Short-Term Volatility

Quarterly PAT Drop: ₹248 Cr → ₹81.3 Cr (▼76%)

⚠️ This sharp decline may stem from project delays or one-off factors. Investigate management commentary or project pipeline for clarity.

Dividend Yield: 0.12%

Symbolic — not geared toward passive income seekers.

DMA50: ₹221, DMA200: ₹252

Current price below both averages — bearish setup, but potential for value accumulation.

RSI: 38.8, MACD: -0.46

Near oversold — stock may be approaching a reversal zone.

DII Holding ▼ 3.21%

Signals institutional caution. While FII ↑ 0.15% suggests mixed sentiment.

🎯 Ideal Entry Price Zone

Recommended Buy Range: ₹195–₹210

Closer to 52-week low; aligns with technical support and margin of safety.

🛣️ Exit Strategy / Holding Period

If you're already holding

Holding Period: Medium-to-long term (2–4 years), assuming PAT stabilizes and order book remains robust.

Exit Approach

Target range: ₹310–₹340 during re-rating or post results bounce.

Consider trimming if PEG rises above 1 or ROCE/ROE dip consistently below 18%.

Red Flags to Watch

Sustained earnings decline across quarters

Debt rising above 0.6

MACD divergence or RSI crossing above 75 on low volume

📌 Verdict

KNRCON is a hidden gem in the infrastructure sector with top-tier capital returns and deep-value pricing. Its near-term pain appears driven by project execution lags, not structural weakness. Long-term investors can consider gradual accumulation — provided growth visibility improves.

Want to compare it with other infra players like HG Infra or PNC Infratech? I can help craft a heatmap of value and efficiency across the sector. Let’s dig in.

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