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GR Infraprojects share price jumps 3% after company bags two projects, stock may rally 30%; should you buy?

GR Infraprojects shares have tumbled 17 per cent so far this year. However, the stock is expected to rally 31% going forward given the fact that the company has managed to win decent orders over the last one month.

GR Infraprojects share price jumps 3% after company bags two projects, stock may rally 30%; should you buy?
Motilal Oswal retained buy rating on the stock with a target price of Rs 1,900 per share, implying 31% potential rally in near-term.

GR Infraprojects share price jumped over 3 per cent on Tuesday after the company has emerged as L-1 bidder for two projects – four laning of existing 2-lane stretch from Govindpur to Rajura in Maharashtra, and four laning of existing 2-lane stretch from Bamni to MH/TG Border in Maharashtra in hybrid annuity mode under Commercial Operation NH(O). After having a stellar run last year and hitting an all-time high of Rs 2,277 in October 2021, the stock has witnessed correction. GR Infraprojects shares have tumbled 17 per cent so far this year. However, the stock is expected to rally 31% going forward given the fact that the company has managed to win decent orders over the last one month, according to domestic brokerage firm Motilal Oswal Financial Services.

GR Infraprojects order book solid, good market opportunity

Roads key focus area for; diversification into other segments to support order inflows

According to the brokerage report, GR Infraprojects is looking at several infra verticals to keep its order flows elevated and diversify its business profile. The company has also won its first Power Transmission project (TBCB project), where it will look to complete the EPC portion and then look to monetize the project. “It has bid for more such projects and this can be a big vertical for the company going forward. While it is winning projects in areas like Power Transmission and Metro, Road would continue to be the key focus area for the company,” Motilal Oswal said. Currently, the Road segment currently constitutes around 90% of the unexecuted order book.

InvIT will allow it to bid for more projects going forward

At present, GR Infraprojects’ management is actively looking to offload HAM projects via the InvIT route, which is likely to materialize over the next few quarters. With InvIT, the company expects its competitiveness to improve as the cost of capital can reduce (its credit rating may improve post InvIT). “An InvIT will allow freeing up of capital and the company will be in a position to bid for more projects,” the brokerage noted.

Good market opportunity

Recent order inflows have pumped up the company’s order book (which now stands Rs 23,000 core, including L1) and places the company in a comfortable position. According to Motilal Oswal, the entry into the Power T&D segment, with the recent order win, enhances the potential market opportunity for GRIL. With such an order book, the brokerage expects  GRIL to witness 12% revenue growth over FY21-24, with EBITDA margin in the 16-17% range. 

Should you buy GR Infraprojects shares?

Motilal Oswal retained buy rating on the stock with a target price of Rs 1,900 per share, implying 31% potential rally in near-term.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

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First published on: 29-03-2022 at 13:19 IST