KNR Construct. Q4 FY26 Earnings Call — Analysis (NSE: KNRCON)

KNR Constructions reports flat FY26 consolidated revenue of ₹2,698 Cr with 26.4% EBITDA margin, but guides to a sharp margin drop to 10-11% as competitive intensity rises; order book reaches ₹11,903 Cr and FY27 inflow target set at ₹8,000-10,000 Cr.

6 Jun 2026 · Analysis by Alpha Inflection

The take

Consolidated Revenue (FY26) ₹2,698 Cr . New guidance — FY28 fy28 consolidated revenue ₹3,000 Cr plus . New story: Diversification into mining, railways, solar, d… .

Results

Consolidated Q4FY26 revenue at ₹696 Cr, EBITDA margin 24.3%, net profit ₹106 Cr; FY26 revenue ₹2,698 Cr, EBITDA margin 26.4%, net profit ₹437 Cr.

Financial highlights

Guidance

Management targets FY27 order inflow of ₹8,000-10,000 Cr and expects overall EBITDA margin to remain around 10-11% due to aggressive bidding, while guiding FY28 revenue of over ₹3,000 Cr.

What management committed to

• KNR Constructions targets order inflow of ₹8,000-10,000 Cr during FY27, comprising a healthy mix of NHAI projects, irrigation projects, mining and other state government infrastructure work. — ₹8,000-10,000 Cr, FY27
• Management expects consolidated EBITDA margin to be around 10-11% going forward, based on the current order book composition and competitive bidding environment. — 10-11%, FY27
• Management targets consolidated revenue of over ₹3,000 Cr in FY28. — ₹3,000 Cr plus, FY28
• If the Banhardih mining project becomes operational, management expects revenue of ₹300-350 Cr in FY28 from that project. — ₹300-350 Cr, FY28
• The company expects to receive the outstanding Telangana irrigation dues (approximately ₹1,400 Cr including unbilled) in the next quarter (Q1FY27). — ₹1,400 Cr, Q1FY27
• KNR Constructions plans capital expenditure of ₹200-250 Cr in FY27, primarily for the mining project and the elevated corridor project, subject to project start. — ₹200-250 Cr, FY27
• The two newly awarded HAM projects (Chennai elevated corridor and Mahabubnagar laning) have a tentative equity requirement of ₹510 Cr, to be infused over the construction period. — ₹510 Cr
• The ECR Chennai HAM project is expected to achieve financial closure by June 2026, appointment within two months thereafter, and will begin contributing revenue in H2 FY27 (Q3 or Q4). — FY27

Key themes

Margin compression and diversification in an intensely competitive market

How the narrative shifted

• Margin compression from intense competition: Management attributes the slide in EBITDA margins to aggressive bidding forced by a prolonged awarding slowdown and overcapacity.
• Diversification into mining, railways, solar, data centres: The company is actively building capabilities in mining, railways, large-scale solar and data centre EPC to reduce reliance on road margins and tap wider infra spend.
• Order book replacement at lower margins: While order book has grown to ₹11,903 Cr, new wins came at thin margins (~11-12% EBITDA), reshaping consolidated profitability going forward.
• Telangana irrigation receivables unlocking: Management indicates a high probability of clearing the long-pending ₹1,400 Cr Telangana irrigation dues in Q1FY27 after fresh political push, which would significantly improve cash flows.
• Monetisation and capital recycling: Successful sale of one HAM SPV to an InvIT for ₹205 Cr demonstrates ability to recycle capital and upstream cash, supporting future equity needs.
• Sectoral awarding slowdown but long-term commitment intact: While NHAI awarding fell 22% in FY26 and missed targets, the government’s long-term infra push, new segments, and faster cost pass-through are expected to sustain demand.

Operational commentary

• Won two HAM projects: Chennai elevated corridor (₹2,163 Cr, construction 3 years) and Mahabubnagar laning (₹1,734 Cr, 2 years), tentative equity requirement ₹510 Cr.
• Mining project (Banhardih coal block) forest clearance F1 received; Gram Sabha pending, start likely 7-8 months away; management expects initial revenue of ₹300-350 Cr in FY28, scaling to ₹1,000 Cr in the fifth year.
• Monetised HAM SPV KNR Palani Infra: sold entire equity to Indus Infra Trust, received ₹205.05 Cr consideration plus ₹90 Cr cash upstream.
• Telangana irrigation package-4 debtor stuck at ~₹670 Cr (total Telangana outstanding ₹1,400-1,450 Cr including unbilled); management expects resolution within 1-2 months after meeting with Finance Minister.
• Order book execution period ex-mining is 3-3.5 years; new HAM orders to start contributing from H2 FY27 (Chennai) and Q4 FY27 (Telangana HAM).
• Diversification efforts: bidding for railways (₹800 Cr Shimoga project), exploring solar EPC (only large scale >500 MW), data centre EPC (early-stage MoU), and continued mining & flyover bids.
• Working capital days improved to 78 from 93, primarily due to non-moving irrigation debtors; other government/NHAI payments regular.

Analyst Q&A

• Q. What is the revenue guidance for FY27?

  Revenue is quite difficult to say because which project will be awarded when... first time we are unable to say what we are going to do this year... we'll try to touch around ₹2,000 plus.

• Q. What EBITDA margin should we model going forward?

  At recent Mahabubnagar project we aimed 11-12% EBITDA; overall we should be doing good, but we'll know more after winning more orders... overall order book now we expect around 10-11% EBITDA.

• Q. When can we expect receipt of Telangana irrigation dues?

  We had extensive meeting with Finance Minister last week; within 1-2 months we'll be solving... next quarter we shall be able to get it.

• Q. What is the start timeline and revenue potential of the mining project?

  Gram Sabha is pending; after that not less than 7-8 months to start... if operational in FY28, revenue could be ₹300-350 Cr that year scaling to ₹1,000 Cr in fifth year.

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