Broker’s call: SRM Contractors (Buy)

SRM Contractors poised for growth in India’s infrastructure sector, driven by its expertise in construction and infrastructure projects

Target: ₹694

CMP: ₹375.40

SRM Contractors Ltd is a Jammu-based infrastructure development company specialising in challenging terrains and EPC/HAM mode projects.

SRM poised for growth in infrastructure sector, driven by its expertise in construction and infrastructure projects. The company’s strong track record of constructing over 100 km of roads annually, including four-lane highways and urban development projects, positions it for long-term growth. SRM’s competitive strengths include equipment ownership, strong financial performance, and an in-house integrated model, enabling it to capitalise on market opportunities and maintain a robust financial position.

The company’s robust order book and LOA, totaling ₹1,663.69 crore, equivalent to 4.89 times its FY24 revenue, provides medium-term revenue visibility with a diversified portfolio of projects, including roads, bridges, and small hydro projects. With a stellar 440.14 per cent y-o-y growth in YTD order intake, surpassing ₹1,336.65 crore, SRM is well positioned for sustained growth.

Khandwala Securities has initiated coverage on SRM with a ‘Strong Buy’ rating, driven by its attractive valuation and growth prospects. The company’s stock price currently trades at a forward P/E level of 13.07x FY26E EPS, representing a significant discount to the Indian construction industry average P/E ratio (TTM) of 28x.

Published on April 15, 2025