Fundamental Analysis- GR Infraprojects IPO

Last updated on July 7th, 2021 at 12:33 pm

Fundamental Analysis- GR Infraprojects IPO

Key Financial Highlights of GR Infraprojects IPO

• Total revenue for FY21 rose by 23% to Rs 7906.94 crore from Rs 6423 crore for FY20.
• PAT is showing an increasing trend throughout the last three fiscals FY18-FY20.
• EBITDA and the Net Margins are plotted in the chart below. Some pressure can be seen in the margins as it shows a slight decline over the last three fiscals.
• Total debt is Rs 4758 crore and debt to equity is 1.2x for FY21.
• Return on net worth is 23.95% for FY21.

Check out GR Infraprojects IPO Offer Details and Business Analysis here

GR Infraprojects Limited IPO

Valuation parameters

The valuation figures are as of 31^st March 2021. The Issue is priced at 8.5 times its earnings which is well below its peers and thus the Issue appears to be reasonably priced. The P/BV is 2.03x calculated at the upper price band of Rs 837 per share.

Key financial parameters of the peers

Conclusion

The infrastructure sector in India has a huge scope of improvement; only 24% of the national highway network in India is four-lane. India is expected to become the world’s third-largest construction market and huge investments would be required. Though, it can take a longer time for this sustainable development of the infrastructure.

GR Infra is focused more on EPC activities i.e. road projects and has a track record of timely completion through its in-house integrated model. The Issue is reasonably valued and has consistent financial performance with strong gross margins. Hence, an investor may subscribe for the long term. RHP

RHP

https://www.sebi.gov.in/filings/public-issues/jun-2021/g-r-infraprojects-limited_50742.html

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CA Priyanka Choudhary Jain

Chartered Accountant & an experienced credit analyst. She has worked with CRISIL as a Senior Credit Analyst on rating assignments including business & financial analysis in Corporates as well as the Public Finance Sector. Please mail your queries, feedback, and any suggestions to her on info.financepost@gmail.com

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