Fundamentals

KNR CONSTRUCTION 

Ticker : 532942
BUY: Rs. 234.55
Target: Rs. 268

KNR Construction is an infrastructure player majorly involved in providing Engineering, Procurement and Construction (EPC) services. As on December 31, 2018, the company’s orderbook was at Rs. 1,540.8 crore and in addition to these, the company recently won 5 HAM projects which takes its overall order book to Rs. 5,515.8 crore. This strong order book translates to a book-tobill of around 2.9x on FY18 revenue which gives good revenue visibility for the next 2-3 years. In Q3FY19, the company’s revenue grew marginally by 4 per cent yoy to Rs. 448.9 crore while net profit declined 21 per cent yoy to Rs. 52.1 crore. Given KNR’s strong working capital management, prudent project selection and lean balance sheet, despite being involved in capital intensive projects, we recommend BUY on the stock.

INTERNATIONAL PAPER APPM LTD. 

Ticker : 502330
BUY: Rs. 477.65
Target: Rs. 535 


International Paper AAPM is an integrated paper and pulp manufacturer. The company posted robust numbers for Q3FY19. Its standalone revenue stood at Rs 376.19 crore, up by 14.6 per cent yoy. EBITDA for the quarter rose by 95.2 per cent yoy to Rs 108.81 crore, with a corresponding margin expansion of 1195 bps. EBITDA margin stood at 28.9 per cent. The net profit came in at Rs 57.87 crore, PAT margin stood at 15.38 per cent . The company, in partnership with local farmers, enabled planting casuarina clones and seedlings which will provide fibre, the key raw material component. Indian paper industry has shown strong momentum in the recent past. India recently has also emerged as world's fastest growing paper market, posting CAGR of 6-7 per cent. This strong momentum at the industry level will directly benefit company. Hence, we recommend BUY.