GR Infra shares: Kotak sees 39% downside; other analysts remain mixed

Shares of G R Infraprojects Ltd rose more than 4 per cent during the trading session on Thursday but gave up its gains as the session progressed as the brokerage firms remained mixed on the stock, with some analysts suggesting a 40 per cent downside in the counter.
 

GR Infraprojects reported a 42.1 per cent year-on-year (YoY) jump in net profit at Rs 553.1 crore for the fourth quarter that ended March 31, 2024. The infrastructure company's revenue from operations increased 1 per cent YoY to Rs 2,485.1 crore in the given quarter.
 

At the operating level, Ebitda rose 19.4 per cent to Rs 540.3 crore in the fourth quarter of this fiscal over Rs 670.5 crore in the year-ago period. The Ebitda margins came in at 21.7 per cent in the reporting quarter, the company's financial statement for the period.
 

Shares of GR Infraprojects rose 4.06 per cent to Rs 1619.50 during the trading session on Friday, but gave up its gains partially. The company was commanding a total market capitalization of more than 15,500 crores. The scrip had settled at Rs 1,556.25 in the previous trading session on Thursday.
 

FY24 has been a challenging year in terms of new order wins, as the result order book for  GR Infra  is down 14 per cent. Just 58 per cent of the order backlog is executable; hence, the guidance for FY2025 remains muted, with flat revenue growth and margins in the range of 13-14 per cent, said Kotak Institutional Equities.
 

"GR Infra's results came in ahead of expectation, as in-line execution was aided by better-than-expected margins.  We raise our estimates by 10 per cent and 6 per cent for FY2025 and 26E, respectively, owing to pick-up in execution and slight improvement in margins" Kotak said, retaining the 'sell' call on the stock with a fair value of Rs 990, suggesting a 39 per cent down in the stock.
 

GR Infra reported a top-line expansion of 13 per cent YoY in Q4FY24 while Ebitda margins surged 320 bps YoY due to receipt of early completion bonus during the quarter.  GR Infra ended the quarter with an order book (including L1) of Rs 21,100 crore. The company’s InViT got listed during the quarter through which it monetised seven assets, resulting in a gain of Rs 1,400 crore, said Nuvama Institutional Equities.
 

"Low leverage levels (net D/E 0.05x) and rising segmental diversification are positive for the company. Improvement in revenue visibility leads us to revise FY25E and 26E EPS upwards by 3 per cent and 5 per cent and P/E multiple from 15 times to 20 times," it added maintaining a 'hold' tag with a revised target price of Rs 1,576 on the stock.
 

GR Infra's performance in 4QFY24 has been largely in line with estimates. Revenue growth and margins are expected to be muted in FY25 and improve materially in FY26. The company is looking to diversify its order book and bid actively for projects in transmission, ropeway, tunneling, and MMLP, said Motilal Oswal Financial Services.
 

"Given a strong order pipeline and diversification of order book into non-road segments, we marginally increase our FY25 and FY26 EPS estimates by 3 per cent and 4 per cent. We expect GR Infra to clock a 9 per cent revenue CAGR over FY24-26, with Ebitda margin in the range of 13-15 per cent," it said, reiterating a 'buy' rating with a revised target price of Rs 1,790.