Concall AI

KNR Constructions Limited — Q4 FY25 earnings call

Call held 30 May 2025

Management summary

KNR Constructions reported a mixed Q4 FY25, with standalone revenue at INR851 crores and net profit declining to INR75 crores, primarily due to projects being in their final stages impacting margins. However, full-year FY25 consolidated performance showed robust growth, with revenue up 7% and net profit up 33% year-on-year. The company maintains a strong order book of INR5,052 crores and anticipates significant new order inflows of INR8,000-10,000 crores by FY26, focusing on diversification into mining and other infrastructure sectors amidst a heated road sector.

Highlights

Q4 FY25 Standalone Revenue stood at INR851 crores, with EBITDA at INR118 crores and a margin of 13.8%.
Q4 FY25 Standalone Net Profit was INR75 crores, down from INR198 crores in Q4 FY24.
FY25 Standalone Revenue reached INR3,359 crores, with EBITDA at INR626 crores (18.6% margin) and Net Profit growing 47% YoY to INR726 crores.
Q4 FY25 Consolidated Revenue was INR975 crores, with EBITDA at INR221 crores (22.7% margin) and PAT at INR8 crores due to a consolidation adjustment.
FY25 Consolidated Revenue grew 7% YoY to INR4,753 crores, EBITDA grew 55% YoY to INR1,625 crores (34.2% margin), and Net Profit grew 33% YoY to INR1,002 crores.
Total Order Book as of March 31, 2025, was INR5,052 crores, with an unbilled portion of INR968 crores.
Consolidated Net Debt to Equity increased to 0.41x as of March 31, 2025, from 0.34x in March 2024.
Management targets INR8,000-10,000 crores in new order inflows by end of FY26, with an execution target of INR2,500-3,000 crores from the existing order book for FY26.

Key financials

3 periods

Headline

Total Order Book (Mar 31, 2025)
₹5,052 Cr
Unbilled Revenue (Mar 31, 2025)
₹968 Cr
Working Capital Days (Mar 31, 2025)
93 days
Consolidated Debt (Mar 31, 2025)
₹1,847 Cr
Net Debt to Equity (Consolidated, Mar 31, 2025)
0.41×
Mobilization Advance (Mar 25)
₹20 Cr
Retention Money
₹846 Cr

Q4 FY25

Standalone Revenue
₹851 Cr
Standalone EBITDA
₹118 Cr
Standalone EBITDA Margin
13.8%
Standalone Net Profit
₹75 Cr
Consolidated Revenue
₹975 Cr
Consolidated EBITDA
₹221 Cr
Consolidated EBITDA Margin
22.7%
Consolidated PAT
₹8 Cr

FY25

Standalone Revenue
₹3,359 Cr
Standalone EBITDA
₹626 Cr
Standalone EBITDA Margin
18.6%
Standalone Net Profit
₹726 Cr
YoY +47%
Consolidated Revenue
₹4,753 Cr
YoY +7%
Consolidated EBITDA
₹1,625 Cr
YoY +55%
Consolidated EBITDA Margin
34.2%
Consolidated Net Profit
₹1,002 Cr
YoY +33%
Capex
₹22 Cr

What they filed

Q1 FY27: revenue down 9.5%, net profit up 452.9% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	884	743	851	483	493 −44%	585 −21%	535 −37%	437 −10%
Expenses	719	592	734	418	439	554	507	371
EBITDA	165	152	118	66	54 −67%	31 −80%	28 −76%	66 +0%
Margin	19%	20%	14%	14%	11%	5%	5%	15%
Other income	282	117	19	22	4	9	29	289
Interest	2	3	4	3	5	3	3	2
Depreciation	23	23	22	15	15	15	14	10
Profit before tax	422	242	110	69	38 −91%	22 −91%	40 −64%	343 +397%
Tax rate	21%	25%	32%	26%	27%	21%	52%	18%
Net profit	334	182	75	51	28 −92%	18 −90%	19 −75%	282 +453%
EPS	11.89	6.48	2.67	1.82	0.99	0.63	0.68	10.04

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Order Book Composition (Mar 31, 2025)
40% HAM28% Irrigation21% Pipeline Projects11% Other Road Projects
Revenue Contribution (Q4 FY25)
46% Road Hybrid19% Irrigation30% Road EPC4% Back-to-back

Guidance & targets

Order Inflow

New Order Inflow Order Inflow · by end of FY26 · Medium confidence INR8,000-10,000 crores

With the government emphasis on infrastructure development, we anticipate new outwards in the coming quarters and which aims order inflow of approximately at least INR8,000 crores to INR10,000 crores by the end of '26.

— K. Venkatram Rao, General Manager, Finance and Accounts

Revenue

Execution from existing order book (Standalone) Revenue · FY26 · Medium confidence INR2,500-3,000 crores

So, definitely we can execute this year between INR2,500 to INR3,000 with existing order book only.

— K. Venkatram Rao, General Manager, Finance and Accounts
MSRDC project revenue contribution Revenue · FY26 · Medium confidence INR300-500 crores

So, I think around 400 to 500, 300 to 400 crores, we can book on this year because it will come in the last quarter kind of time.

— K. Jalandhar Reddy, Executive Director

Profitability

EBITDA Margin (Standalone) Profitability · Future · Medium confidence 13-14%

As far as future margin is concerned, so existing order book will give the same between 13% to 14%.

— K. Venkatram Rao, General Manager, Finance and Accounts
EBITDA Margin (Overall) Profitability · Future · Low confidence 13-14%

I think actually around 13%-14% it is possible. Maybe little bit tough minus 1%, 2% we are expecting because that overheads will be higher and that turnover is lesser. So, that may count a little bit problematic to us. That's why we are a little bit downgrading the expectations also.

— Kamidi Reddy

Execution

Water pipeline project execution Execution · FY26 · Medium confidence 35-40%

Yes, we can expect that. Around INR300 crores to INR400 crores definitely we can target.

— K. Venkatram Rao, General Manager, Finance and Accounts

Capex

Capex Capex · FY26 · High confidence INR20-30 crores

Okay, so '26 would be the similar kind of a INR20 crores, INR30-odd crores

— K. Venkatram Rao, General Manager, Finance and Accounts
Capex Capex · FY27 · Medium confidence INR100-200 crores

but FY '27 can see maybe a INR100 crores, INR200 crores kind of a capex?

— K. Venkatram Rao, General Manager, Finance and Accounts

Bonus Income

Bonus for early completion Bonus Income · Q1 FY26 · High confidence INR3.26 crores

The early delivery has made the company eligible for a bonus of INR3.26 crores. ... Sir, this INR3 crores bonus will be booked -- in the first quarter of FY '26, this quarter or it will be in 2Q? It should receive from the NOC, which is due in first quarter.

— K. Venkatram Rao, General Manager, Finance and Accounts

Risks & concerns

Show cause notice and potential debarment for Kerala BOT project
medium

NHAI issued a show cause notice for partial damage due to subsoil conditions, with a potential debarment for one year for the concessionaire and a financial impact of INR25-30 crores for repairs. Management is confident in their defense and exploring legal options.

Both acknowledged
Slowdown in road infrastructure sector and election-related delays
medium

The road infrastructure sector witnessed a slowdown, and election-related delays have postponed some bidding, though recovery signs are now visible.

Management acknowledged
Increased Working Capital Days
low

Working capital days increased from 89 days in March '24 to 93 days in March '25.

Management acknowledged
Increased Net Debt to Equity
low

Consolidated net debt to equity increased from 0.34x in March '24 to 0.41x in March '25.

Management acknowledged

Q&A highlights

3 direct

Show cause notice and potential ban for Kerala BOT project Direct

Actually, sir, that the notice clearly says that 15 days notice is given for us to show cause, telling which why we should not debar you for one year and then some small penalty is there, 0.5% of the value. Then these, actually we have given the confident, we are very confident that we have not done any mistake in there. It's a complete waterlogged area where the technically, because of the water loggedness somewhere in between the beneath the foundation, that particular area has been submerged.

Clarifies the nature and scope of the show cause notice, management's defense, and potential financial impact (INR25-30 crores) for the specific project, not the parent company.

Asked by Vasudev

EBITDA margin decline in Q4 FY25 and future outlook Direct

In respect of this reduction in EBITDA, that already we explained that the reason is being that now whatever our existing order book is there for almost all projects, except the new one, all projects is almost frag end. Almost we have completed, almost 90% to 95% of that project. So, if we are executing in that project, because projects will be in the last phase, then we could not be able to generate that much of revenue. Accordingly, expenditure will be a little higher.

Explains the specific reason for the Q4 margin compression (projects nearing completion) and reiterates a 13-14% margin for the existing order book, with potential improvement from new, higher-margin projects.

Asked by Jainam Jain

Order inflow targets for FY26 and bid pipeline Direct

So, this year, we are targeting somewhere between INR8,000 crores to INR10,000 crores. We are targeting to add in our order book. And as the pipeline is already, sir, has explained, for NHAI project, INR30,000 crores to INR40,000 crores, NHAI projects are there that we want to bid actually. And the state government projects also, they are between INR10,000 crores to INR15,000 crores are there.

Provides specific targets for order inflow and details the significant bidding pipeline across NHAI, state government, and mining sectors, offering visibility on future growth drivers.

Asked by Shravan Shah

3 min read 6 chapters

Detailed narrative

Q4 FY25 Performance Overview

KNR Constructions reported a standalone revenue of INR851 crores for Q4 FY25, with EBITDA at INR118 crores, resulting in a margin of 13.8%. Net profit for the quarter stood at INR75 crores, a decline from INR198 crores in Q4 FY24. The management attributed this margin compression to projects being in their 'frag end' or final stages, leading to lower revenue generation and higher associated expenditures. Consolidated Q4 FY25 revenue was INR975 crores, with EBITDA of INR221 crores (22.7% margin) and PAT of INR8 crores, impacted by a consolidation adjustment related to the sale of a step-down subsidiary.

Full Year FY25 Financial Highlights

For the full fiscal year 2025, standalone revenue was INR3,359 crores, with EBITDA at INR626 crores (18.6% margin). Standalone net profit saw a significant 47% year-on-year growth to INR726 crores. On a consolidated basis, FY25 revenue grew 7% YoY to INR4,753 crores. Consolidated EBITDA posted a strong 55% growth YoY to INR1,625 crores, achieving a margin of 34.2%. Consolidated net profit also grew by 33% YoY to INR1,002 crores, demonstrating robust overall performance despite Q4 standalone challenges.

Order Book and Future Inflow Targets

As of March 31, 2025, the company's total order book stood at INR5,052 crores, with an unbilled revenue portion of INR968 crores. The order book is diversified, with HAM projects accounting for 40%, irrigation 28%, pipeline projects 21%, and other road projects 11%. Management is targeting new order inflows of approximately INR8,000-10,000 crores by the end of FY26. This pipeline includes INR30,000-40,000 crores from NHAI, INR10,000-15,000 crores from state government projects, and INR2,000-5,000 crores from mining projects.

Execution and Margin Outlook

From the existing order book, KNR Constructions expects to execute INR2,500-3,000 crores in FY26. The MSRDC project, once LOA is received and mobilization completed (estimated 3-4 months), is expected to contribute INR300-500 crores to revenue in FY26, primarily in the last quarter. The company anticipates maintaining an EBITDA margin of 13-14% for its existing order book. While acknowledging potential slight pressure due to higher overheads and lower turnover in the near term, new projects, especially in irrigation and mining, are expected to improve future margins.

Kerala BOT Project Show Cause Notice

KNR Construction Limited received a show cause notice from NHAI regarding partial damage to an under-construction BOT project in Kerala. The damage was attributed to indeterminate subsoil conditions and a high water table, causing excessive settlement in an approach ramp. Management clarified that the notice is for the concessionaire, not the parent company, and they are confident in their defense, having taken proper approvals and conducted subsoil investigations. The estimated financial impact for repairs, potentially involving a viaduct solution, is around INR25-30 crores, and the company is exploring legal options if necessary.

Working Capital, Debt, and Capex

The company's working capital days increased slightly to 93 days as of March 31, 2025, from 89 days in March 2024. Consolidated debt rose to INR1,847 crores from INR1,258 crores, leading to an increase in net debt to equity ratio to 0.41x from 0.34x. Capex for FY25 was INR22 crores. For FY26, capex is projected to be similar at INR20-30 crores, but it is expected to increase significantly to INR100-200 crores in FY27 to support new project inflows, particularly in diversified sectors like mining and MSRDC.

This is an AI-generated summary of a publicly available earnings call transcript.

View original transcript