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Focused EPC player with road projects focus- The Order Book primarily comprises EPC and HAM projects in the road sector across the states of Uttar Pradesh, Madhya Pradesh, Maharashtra, Gujarat, Chattisgarh, Rajasthan, Andhra Pradesh, Bihar, Manipur, Odisha, and Himachal Pradesh. In addition, the order Book also includes railway projects. The company has a long-standing relationship with clients including the National Highways Authority of India, Ministry of Road Transport and Highways, Public Works Department, Government of Rajasthan, and Rajasthan State Road Development Corporation. The company had 16,333 employees as on 31st March 2021.
Established track record of timely execution- The Company has an established track record of efficient project management and execution experience, involving trained and skilled manpower, efficient deployment of equipment, and an in-house integrated model.
The financial performance of GR Infra has remained consistent in the last three fiscals. Total revenue for FY21 has increased by 23% to Rs 7906 crore from Rs 6423 crore in FY 20. GR Infra posted PAT of Rs 953 crore for FY21as against Rs 800 crore for FY20. Though the EBITDA margins show an increasing trend the net margins are declining. Return on net worth is 23.95% for FY21. Debt to equity is 1.2x for FY21.
| Particulars | FY21 | FY20 | FY19 |
| Total Revenue | 7906.94 | 6423.71 | 5325.53 |
| PAT | 953.22 | 800.83 | 716.64 |
| EBITDA | 1912.55 | 1637.08 | 1326.30 |
| Total Assets | 10116.05 | 7783.42 | 5828.73 |
| Cash and Bank | 830.79 | 947.99 | 947.99 |
| EBITDA Margin | 24.19% | 25.48% | 24.90% |
| Net Margin | 12.06% | 12.06% | 13.46% |
With EPS of 98.31 per share, the Issuer's P/E is 8.51x calculated at the upper price band of Rs 837 per share. The sector has an average P/E of 16.73x which indicates that the issue is reasonably priced. The P/BV is 2.03x at upper price band. The peers of the Issuer and their comparison can be seen from the below table.
| Particulars | KNR | PNC | HG Infra | Dilip Buildcon | Ashoka Buildcon | IRB | Sadbhav Engineering |
| Face Value per share | 2 | 2 | 10 | 10 | 5 | 10 | 1 |
| Total Income for FY21 | 2955.26 | 5898.9 | 2617.1 | 10210.5 | 5121.9 | 5487.5 | 1 |
| EPS | 14.49 | 19.37 | 36.31 | 31.92 | 9.84 | 3.33 | 46.21 |
| NAV per share | 69.67 | 119.01 | 163.04 | 248.58 | 22.06 | 196.35 | 93.3 |
| Return on net worth | 20.79% | 16.28% | 22.27% | 7.84% | 44.60% | 1.70% | 49.53% |
| P/E | 15.2 | 12.9 | 10.58 | 17.42 | 10.61 | 48.74 | 1.65 |
GR Infraprojects has over 25 years of experience in executing EPC projects which have been in the road sector comprising construction and development of state and national highways, bridges, flyovers, and others. The business of the Issuer focuses on the road projects executing EPC projects and accordingly has established credentials as an EPC player. The company has an established track record of timely execution.
The top line of the company is moving upwards through some pressure can be seen in the net margins. As of March 31, 2021, the total borrowings were 4495 crores, while the net worth was 3980 crore; debt is quite on the higher side. The IPO is reasonably valued when compared with its peers. Hence one may subscribe for the long term.
Review By CA Priyanka Choudhary on 28th Jun 2021
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.
