Buy GR Infraprojects Ltd For Target Rs. 315 By JM Financial Services
G R Infraprojects’ (GRIL) 1Q26 adjusted PAT at INR 2.2bn beats JMFe of INR 2bn (consensus: INR 1.73bn) led by higher revenue and margins. EBITDA margins adjusted for bonus/claims expanded by 20bps YoY on to 12.2% (JMFe: 12%). GRIL has maintained its revenue growth guidance of 10-15% with EBITDA margins of 12-13% for FY26E. With a robust bid pipeline of c.INR 3tn, it is expecting order inflows of INR 220bn for FY26E. GRIL’s order backlog stood at INR 194bn (3x TTM revenues) as on Jun-25. Additionally, it is L1 in two MSRDC projects worth INR 43bn (LoA expected in 3Q26). Of the existing backlog, AD is pending for only Agra Gwalior BOT` project which is expected in Nov-25 post which its entire backlog will be under execution. GRIL is well capitalised to capture opportunities ahead which would drive 23% core EPS CAGR over FY25-28E. Valuations are attractive at 8x/7x FY27/28E core EPS (without interest income from subsidiaries and InVIT units) after adjusting for value of assets. Maintain BUY with SoTP based price target of INR 1,605 (valuing GRIL’s EPC business at 14x FY27 core EPS and its asset portfolio at INR 679/share).
* PAT beats JMFe due higher revenue/margins: 1Q25/1Q26 Revenue/EBITDA includes claims/bonus of INR 168mn/100mn hence YoY numbers are not comparable. GRIL’s revenue/EBITDA declined by 4%/6% YoY to INR 18.3bn/INR 2.3bn (JMFe: INR 17.5bn/INR 2.1bn) due to weak executable backlog. EBITDA margins adjusted for bonus/claims expanded by 20bps YoY on to 12.2% (JMFe: 12%). Other income grew by 8% YoY to INR 1.16bn (JMFe: INR 1.3bn) and it includes income from InVIT units of c.INR 400mn. Interest costs declined sharply by 58% YoY to INR 119mn (JMFe: INR 150mn) due to lower debt levels (INR 3.6bn in June-25 vs. INR 8.4bn in June-24).
* Order backlog to be entirely executable by Nov-25; bid pipeline strong at c.INR 3tn: GRIL received order inflows of c.INR 16bn in YTD taking its order backlog stood to INR 194bn (3x TTM revenues) as on Jun-25. Additionally, it is L1 in two MSRDC projects worth INR 43bn (LoA expected in 3Q26). Of the existing backlog, AD is pending for only Agra Gwalior BOT project which is expected in Nov-25 post which its entire backlog will be under execution. GRIL has a robust bid pipeline of c.INR 3tn comprising of c.INR 2tn in highways, INR 400bn in Hydro/tunnels, INR 540bn in T&D and INR 220bn in rail/metro.
* Maintains guidance for FY26E: GRIL has maintained its revenue growth guidance of 10– 15%, with EBITDA margins of 12–13% for FY26E. Margins are expected to improve beyond this range once revenue growth happens. With a robust bid pipeline of c.INR 3tn, it expects order inflows of INR 220bn for FY26E. Total equity requirement for its asset portfolio stands at c.INR 26bn, which includes INR 10.8bn for its BOT project and it is to be deployed over FY26–FY28E.
* Maintain BUY with price target of INR 1,605: GRIL is well capitalised to capture opportunities ahead which would drive 23% core EPS CAGR over FY25-28E. Valuations are reasonable at 8x/7x FY27/28E core EPS (without interest income from subsidiaries and InVIT units) after adjusting for value of assets. We value GRIL’s EPC business at 14x FY27 core EPS and its asset portfolio at INR 679/share to arrive at SoTP based price target of INR 1,605. Maintain Buy.
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SEBI Registration Number is INM000010361
