Buy J Kumar Infraprojects Ltd for the Target Rs. 722 by Axis Securities Ltd
Investment Rationale
* Robust order book to drive revenue growth: As of December 31, 2024, the company’s order book stood at Rs 20,529 Cr—4x its FY24 revenue. Year-to-date order inflows totalled Rs 4,991 Cr. This strong order book ensures revenue visibility for the next 3–4 years. We project a revenue CAGR of 17% over FY24–FY26E.
* Strong bidding pipeline: The company has a strong bidding pipeline of Rs 40,000–47,000 Cr. This includes building projects worth Rs 8,000–9,000 Cr, metro and railway projects around Rs 7,000–8,000 Cr, and elevated corridors of approximately Rs 30,000 Cr. The tender pipeline remains strong, and the company aims to secure sizeable order intake in FY26 in the range of Rs 8,000–10,000 Cr.
* EBITDA margin to improve: The company expects EBITDA margins to improve in FY26, exceeding 15%, supported by efficient project execution and a strong executable order book.
Valuation & Analyst Recommendation
* JKIL remains a leading EPC contractor, supported by a robust order book, strong execution capabilities, and a healthy balance sheet. The company is well-positioned to deliver a Revenue/EBITDA/APAT CAGR of 17%/19%/22% over FY24–FY26E, underpinned by its diversified order backlog, consistent bidding activity, solid order inflows, and expanding construction opportunities.
* The stock is currently trading at 10x/9x its FY26E/FY27E earnings—an attractive valuation relative to its strong fundamentals. The recent correction in share price provides a favourable entry point. We reiterate our BUY rating with a target price of Rs 722/share, implying a 10% upside from current levels.
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SEBI Registration number is INZ000161633
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