KNR Construct.

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.

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.

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.

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.

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.

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.