KNR Construct. Q1 FY27 Results (NSE: KNRCON)
Signal: Revenue declined
The read
The operating trajectory weakened: consolidated revenue fell 4.0% YoY to ₹58794.47 lakh, EBITDA fell 47.9% to ₹10844 lakh and margin compressed 1440bps to 18.4%, while PAT of ₹8080.83 lakh was supported by a ₹11317.07 lakh exceptional gain; this reverses the prior quarter's 24% margin and leaves the previously guided FY27 10-11% margin path credible but dependent on execution recovery and subsidiary losses improving.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹587.94 Cr | -4.0% | -15.5% |
| EBIT | ₹97.74 Cr | -49.3% | |
| Net profit | ₹80.81 Cr | -34.5% | |
| EPS | ₹2.87 | -34.6% | |
| EBIT margin | 18.4% |
P&L walk
Revenue declined 4.0% YoY to ₹58794.47 lakh, EBITDA fell 47.9% to ₹10844 lakh and margin contracted to 18.4%; PAT declined 34.5% to ₹8080.83 lakh despite a ₹11317.07 lakh exceptional gain.
Segments
The filing reports a single Construction and Engineering operating segment; the material divergence is basis-related, with standalone PAT of ₹28228.14 lakh versus consolidated PAT of ₹8080.83 lakh because subsidiaries contributed a ₹3657.79 lakh loss and the standalone exceptional gain was not fully reflected in consolidated PAT.
Key positives
- Gross margin expanded to 70.4%, up approximately 829bps YoY, as raw-material cost fell to 29.6% of revenue from approximately 38.0%; the filing does not disclose whether this tailwind is sustainable.
- Standalone parent-level EBITDA remained positive at ₹6942 lakh and margin was 15.9%, despite standalone revenue declining 9.6% YoY.
- The group recognized ₹1839.51 lakh of associates' share of profit, partly offsetting subsidiary losses of ₹3657.79 lakh.
Key concerns
- Consolidated EBITDA fell 47.9% YoY to ₹10844 lakh, 43.9 percentage points below revenue growth of -4.0%, and EBITDA margin contracted 1440bps to 18.4%.
- Consolidated PAT of ₹8080.83 lakh included a ₹11317.07 lakh exceptional gain, so reported profit materially overstates recurring operating earnings.
- Seventeen subsidiaries contributed a combined pre-consolidation PAT loss of ₹3657.79 lakh on revenue of ₹45906.36 lakh, creating a material consolidated drag despite standalone profitability.
- Kaleswaram Package 4 dues of ₹137309.28 lakh remain outstanding, with collections stalled since March 2023; recovery depends on management's contractual and internal assessment.
Earnings quality: includes an exceptional item
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