Brokerage firm HDFC Securities said GR Infraprojects Ltd (GRIL) has built a highly capital efficient execution engine, well oiled with strong funding lines, driven by low interest cost and empowered by strong management depth and bandwidth. Because it considers the long-term growth of the company. The trajectory will be funded largely by internal accruals and asset monetization.
“Diversification will also not bode well for the growth of the company’s strong balance sheet, low levels of fund/non-fund based utilization and strong cash flow generation,” the brokerage said in a note. The development, with a large number of contractors in the early development cycles, failed to reach the next level due to lack of capital. “There remains a wide gap between the largest listed peer and the second largest company; we believe GRIL has the right ingredients that will put it on a path to bridge the gap.”
HDFC Securities believes that GR Infra is well positioned to deliver high quality/sustainable growth, leading to multi-year revaluation. It a. Coverage started with Purchase Rating on a stock with a target price of ₹2,372 per share, a potential jump of up to 50% from the current market price ₹1,590 per.
The brokerage for GRIL believes that neither scale nor diversification is an issue. In the near to medium term, the focus will remain on central government-funded roads and railways projects (including high-speed rail, metro, regional rapid transport systems). In the long term, GRIL is open to bidding for new segments, provided the projects are funded by multilateral agencies, central government or state governments (financial closure should be in place) and margins or balance sheets are not weak.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
Don’t miss a story! Stay connected and informed with Mint.
download
Our App Now!!
.