Detailed Narrative
Q4 & FY26 Financial Performance Overview
KNR Constructions reported consolidated revenue of INR696 crores for Q4 FY26, with an EBITDA of INR169 crores and a net profit of INR106 crores. For the full fiscal year 2026, consolidated revenue stood at INR2,698 crores, yielding an EBITDA of INR711 crores and a net profit of INR437 crores. The consolidated EBITDA margin for FY26 was 26.4%. Standalone performance for Q4 FY26 showed revenue of INR535 crores and net profit of INR19 crores, while for FY26, standalone revenue was INR2,097 crores and net profit INR116 crores.
Robust Order Book and New Project Wins
As of March 31, 2026, the company's total order book, including recently secured HAM projects, reached INR11,903 crores. This quarter saw significant new order inflows, including two HAM projects with a combined value of INR3,897 crores and two EPC projects worth INR133 crores. The order book is diversified, with roads accounting for 49%, irrigation 14%, pipeline 7%, and mining 30%, and is expected to be executed over the next 3 to 3.5 years, excluding the mining project.
Strategic Asset Monetization and Capital Structure
KNR Constructions successfully monetized its entire equity share in KNR Palani Infra Private Limited to Indus Infra Trust. This transaction generated a consideration of INR205.05 crores for the company, which had initially invested INR64.40 crores. Additionally, the SPV upstreamed INR90 crores of cash surplus to KNR. The company's consolidated debt as of March 31, 2026, increased to INR2,438 crores from INR1,847 crores in March 2025, resulting in a net debt to equity ratio of 0.49x, up from 0.41x.
Working Capital Management and Receivables
The company demonstrated improved working capital management, with working capital days reducing to 78 days as of March 31, 2026, from 93 days in the previous year. However, a significant challenge remains with pending debtors of approximately INR670 crores from the Kaleshwaram Package 4 irrigation project. The total outstanding receivables from the Telangana government, including unbilled amounts, are estimated at INR1,400-1,450 crores, with management expressing confidence in a resolution within the next 1-2 months.
Diversification and Margin Outlook
KNR is actively pursuing diversification into new segments such as mining, railways, metro, urban mobility, solar, and data centers. While the company aims to maintain an EBITDA margin of 10-11% on future projects, it acknowledges that intense competition is leading to tighter margins compared to historical levels of 15-20% seen in HAM and irrigation projects. The company plans to invest approximately INR350 crores in mining capex, to be funded from its balance sheet.
Project Execution and Land Acquisition Challenges
Several key projects are facing execution challenges, particularly the Mysore-Kushalnagar HAM projects (Package IV and V), which are at 15.5% and 12.2% physical progress respectively, due to land acquisition issues for service roads. While police protection has been secured to resume work, project timelines are expected to shift. The INR3,500 crore mining project is also anticipated to be delayed by 7-8 months, awaiting F1 clearance for forest land and resolution of Gram Sabha issues.