Buy G R Infraprojects Ltd for the Target Rs 1,100 by Motilal Oswal Financial Services Ltd
Healthy execution; order pipeline strong
* Revenue rose ~33% YoY to ~INR24.2b during 1Q FY27 (vs. our estimate of INR21.2b).
* EBITDA grew 16% YoY to INR2.67b (14% above our estimate). EBITDA margin stood at 11% (-170bp YoY), which was in line with our estimate.
* APAT fell ~6% YoY to ~INR2b (in line with our estimates), impacted by lower other income.
* The order book currently stands at ~INR253b, with road projects accounting for 70% of the order book.
* GRINFRA reported strong execution in 1QFY27; however, margins remained stable. Nevertheless, the order book is robust, anchored by road projects and supported by increasing traction in new segments such as oil & gas, railways, power transmission, and tunneling. We largely maintain our estimates for FY27/FY28 and expect GRINFRA to clock a revenue and EBITDA CAGR of 17% and 28%, respectively, over FY26-28. We reiterate our BUY rating with an SoTP-based TP of INR1,100.
Robust order book, sector diversification and strong financial discipline
* The order book stood at ~INR253b as of Jun’26. The road segment continues to dominate (70% of the order book), but the company is steadily diversifying into oil and gas, railways, metros, power transmission, hydro, tunneling, and telecom.
* The company highlighted a healthy project pipeline across multiple infrastructure segments. It expects FY27 order inflows of ~INR140-150b in roads, ~INR20-30b in tunnels, and ~INR50b in the power transmission segment, taking the overall order inflow guidance to ~INR200-250b.
* The company’s standalone debt-to-equity ratio stood at 0.04x—among the best in the sector. Consolidated net debt-to-equity ratio stood at 0.45x.
Valuation and view
* While execution of fresh orders may only reflect meaningfully in FY28, the company’s healthy order inflow guidance, improving bid environment (less competition, tighter prequalification norms), and balance sheet strength provide visibility for sustainable growth.
* We expect GRINFRA to clock a revenue and EBITDA CAGR of 17% and 28%, respectively, over FY26-28. Reiterate our BUY rating with an SoTP-based TP of INR1,100.
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