Knowledge Marine Gets ‘Buy’ Call As Nuvama Initiates Coverage
Nuvama has initiated coverage on Knowledge Marine & Engineering Works Ltd with a ‘Buy’ rating and a target price of Rs 2,500. The brokerage firm highlighted that Knowledge Marine & Engineering Works operates as an integrated and diversified marine services platform, offering a wide range of solutions across dredging, port operations, and marine infrastructure.
Key Highlights of Nuvama’s Coverage
The brokerage notes that the company benefits from high entry barriers in the industry and a strong win-rate in securing contracts. It further added that margin resilience will be supported by the Tonnage Tax Scheme, which provides tax efficiency for shipping companies, thereby aiding profitability at the Profit After Tax level.
Based on its projections, Nuvama expects growth between FY25 and FY28, with revenue, Earnings Before Interest, Taxes, Depreciation and Amortisation, and PAT registering a compound annual growth rate of 58%, 62%, and 71%, respectively. This growth projection is based on the company’s strong order book and its ability to secure new contracts.
Recent Work Order from Dredging Corporation of India
Earlier on Dec. 19, Knowledge Marine & Engineering Works announced a work order from Dredging Corporation of India for rock dredging at Coastal Berth at JNPA and discharge of dredged material at DS-3 Dumping Ground valued at Rs 58.39 crores.
Knowledge Marine will deploy an integrated fleet of advanced marine assets, including a dedicated drilling and blasting barge, trailing suction hopper dredgers (TSHDs), a backhoe dredger, self-propelled hopper barges, and secured explosives storage facilities. The company has 60 days to mobilize equipment and obtain all necessary permissions before commencing operations.
Investment Rationale
The ‘Buy’ call from Nuvama is based on the company’s strong fundamentals and growth prospects. The brokerage firm believes that Knowledge Marine & Engineering Works is well-positioned to benefit from the growing demand for marine services in India.
The company’s diversified service offerings and strong execution capabilities make it an attractive investment opportunity. Additionally, the Tonnage Tax Scheme is expected to support the company’s profitability and provide a competitive advantage.
Conclusion
In conclusion, Nuvama’s ‘Buy’ call on Knowledge Marine & Engineering Works Ltd is based on the company’s strong fundamentals and growth prospects. The company’s diversified service offerings, strong execution capabilities, and favorable industry trends make it an attractive investment opportunity.
Investors looking to invest in the marine services sector may consider Knowledge Marine & Engineering Works Ltd as a potential investment opportunity. However, it is essential to conduct thorough research and analysis before making any investment decisions.