Fundamental Analysis of J Kumar Infraprojects

Fundamental analysis of J Kumar infrastructure projects: The strength of the economy lies in its infrastructure. The economy needs reliable infrastructure to connect not only people but also businesses. Efficient movement of capital and human resources is essential for rapid growth. One of the companies involved in India’s infrastructure growth is J Kumar Infraprojects. In this article, we perform a fundamental analysis of J Kumar Infraprojects and understand the future potential of the company. Read on to find out more!

Fundamental Analysis of J Kumar Infraprojects

Company Overview

J Kumar Infraprojects was established on December 2, 1999 by Mr. Jagdishkumar M. Gupta and is engaged in the business of executing contracts for various infrastructure projects such as traffic engineering, irrigation projects, civil construction, piling works, etc. It was incorporated as a title company in 1980 with a contract worth Rs 15000.

It has a strong presence in the states of Maharashtra, Delhi, Gujarat, Rajasthan and UP and provides infrastructure services for metros, flyovers, bridges, roads, tunnels, civil and water resources.

Major projects completed by J Kumar Infraprojects include Delhi Metro, Mumbai Metro Line 7, Panjarapole Flyover, Grant Road Skywalk, etc. Currently, we are executing over 30 complex projects such as Airoli Creek Bridge, Kalwa with an order of ₹11,854 crores. Bridge Thane, Pune Elevated Metro, Mumbai Metro Line 6 and Dwarka Expressway.

segment analysis

The company’s operations primarily consist of construction activities within India.

The following chart shows the return breakdown for 9MFY24.

(Source: Investor Presentation)

Analysis of the company’s order book:

(Source: Investor Presentation)

Industry Overview

India is expected to grow at 6.5% in fiscal 2024, according to the Reserve Bank of India. India’s growing economic activity and favorable demand environment suggest that India’s growing momentum will certainly attract significant investments and continue to grow.

Over the past eight years, ports and airports have been greatly improved, and roads, railways and waterways have expanded dramatically. Expanding infrastructure is only one part of the story. Modernization is another important goal that has been pursued aggressively and achieved quickly. To further support infrastructure development and creation, the government has laid a solid foundation through the National Infrastructure Pipeline (NIP) in 2019 and the National Monetization Pipeline (NMP) in 2021, both of which provide numerous opportunities for international investment and collaboration. provides.

During FY20-25, sectors such as energy (24%), highways (19%), cities (17%) and railways (12%) are expected to account for 72% of India’s projected infrastructure investment. The total capital expenditure is ₹111 lakh crores. Of the total planned capital expenditure of `111 lakh crores, `44 lakh crores (40% of NIP) worth of projects are executing, `33 lakh crores (30%) worth of projects are at concept stage and `22 lakh crores (20%). It’s under development. Therefore, we can conclude that this industry has great potential.

J Kumar Infraprojects – Finance

Let us take a look at the financials of J Kumar Infraprojects.

Sales and Net Profit

J Kumar Infraprojetcs reported revenue of Rs 4203 crore in FY23, which is a 19% increase in revenue compared to Rs. In fiscal year 22, it is $352.7 billion. Net profit in FY23 increased by 33% from Rs 206 crore to Rs 274 crore compared to FY22.

Over the five years, sales and net profit grew at a compound annual growth rate (CAGR) of 10.82% and 11.54%, respectively. A closer look at the data shows that sales and profits declined in FY21, mainly due to COVID-19, before recovering significantly to record peak sales in FY23.

By leveraging the latest equipment and maintaining an owned fleet, we have effectively lowered operating costs while reducing turnaround time (TAT) for complex infrastructure projects. The table below shows J Kumar Infraprojects’ revenue and profit over the past five years.

profit

The financial firm reported an operating margin of 14.2% and net profit margin of 6.5% in FY23, compared to an operating margin of 14.3% and 5.8% in FY22. From a 5-year perspective, the operating profit margin is 14.14% and the net profit margin is 5.48%.

Excluding fiscal 2021 due to COVID-19, operating profit margins have been somewhat stable over the past few years. Net profit margins have improved over the past two years, but over the long term they have been in a similar range. The table below shows CDSL’s profit margins over the past five years.

rate of return

When it comes to returns, J Kumar’s business generates healthy returns on the capital employed. RoCE and RoE in FY23 stood at 17.6% and 12.4%, respectively. RoCE and RoE ratios increased this year due to improved efficiency and increased profitability. Although RoE is improving, the company has not been generating good returns for shareholders. From a long-term perspective, the ratio also improved, exceeding the five-year averages of 14.1% and 9.54%, respectively. The table below shows J Kumar Infraprojects’s ROE and RoCE over the last five years.

leverage ratio

If you look at the company’s leverage, you can see that it maintains a relatively low debt level. The highest debt ratio over the past five years was 0.41 in FY19. This indicates less financial strain on the company as it relies less on borrowed capital to finance its operations and expansion. This also means the company can keep more of its profits because it has less commitments to repay debt and interest.

On the interest front, the company’s interest coverage ratio was reported to have improved in FY23 to 4.33. This means the company generated enough gross profits to cover its interest expenses by more than four times. The table below shows J Kumar Infraprojects’ D/E and interest coverage ratios over the past five years.

future prospects

• Become a company with $1 billion in sales by 2027
• Achieves expected order book of ₹20,000+ cr in FY27.
• Increase your brand reputation with a portfolio of innovative and impressive projects.
• Continue to invest in cutting-edge technology and equipment.
• Entering new infrastructure sectors.
• Focus on improving margins and returns.

J Kumar Infraprojects – Key Indicators

conclusion

Concluding the article “Fundamental Analysis of J Kumar Infraprojects”, we have understood its business, finances and planning. The company has evolved in every way. If revenue continues to grow as the company executes on its plans, there is ample room for growth. Prior to investing, further analysis is required to understand the nature and suitability of risk and return. Let us know what you think about this company in the section below.

Written by Ashish Agarwal

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