Shares of GR Infraprojects hit an all-time low of 1,485.80 rupees, down 4% from BSE in intraday trading on Friday. The construction and engineering company’s stock has fallen 22% so far in February after the company reported subdued earnings for the December quarter (Q3FY22). By comparison, the S&P BSE Sensex was down 0.39% over the same period.
GR Infraprojects made its public debut on July 19, 2021. The Rajasthan-based road and highway construction major raised Rs 963 crore via an initial public offering (IPO). The company had issued shares at Rs 837 per share. With the current month’s fall, the stock has corrected 35% from its all-time high of Rs 2,277 reached on October 25, 2021.
In Q3FY22, the company’s consolidated profit after tax (PAT) decreased by 65% year-on-year (YoY) to Rs 145.40 crore, due to lower operating income. Operating revenue declined by 20% year-on-year to Rs 1,980 crore. Earnings before interest, taxes, depreciation and amortization (EBITDA) contracted by 10.2 percentage points to 19.33%. The company said the lower margin was mainly due to the net decrease in claims and bonus income recognized due to early completion of projects, amounting to Rs 170 crore for the current period compared to the previous period.
“GR Infraprojects experienced moderate execution in Q3FY22 due to delays in receiving set dates in its projects. Margin was impacted due to some one-time expenses incurred and increased input costs. Backlog stood at Rs 14,600 crore (excluding L1), with an order book to revenue ratio of around 1.8x,” Motilal Oswal Financial Services said in its earnings update.
Order entries and execution have been weak so far in FY22. However, the project pipeline remains strong, which should lead to order intake in the near term. The recent receipt of set dates should provide execution support in fiscal 23 and 24, the brokerage said. “We are lowering our FY23/24 revenue estimate by 11%/10%, EBITDA estimate by 18%/13% and earnings estimate by 22%/15% to account for “a delay in receiving set dates. in HAM projects and low order flow. With an order book of Rs 14,600 crore, excluding L1, we expect GRIL to see 12% growth in its revenues in fiscal year 21-24E, with an EBITDA margin of between 16-17%,” he said.