KNRCON Q2 FY26 earnings call.
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Revenue
₹646 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹192 Cr
latest reported figure
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What the record says.
KNR Constructions reported muted Q2 FY26 consolidated results with revenue of Rs 646 crore and EBITDA of Rs 192 crore (29.8% margin), impacted by extended monsoon conditions and sluggish project awarding activity. The company faces its worst order inflow environment in recent memory, with the order book at Rs 8,748 crore (down from Rs 11,000 crore in FY21) and road projects comprising only 29% of the mix—lowest in 10 years. Management targets Rs 8,000-10,000 crore order inflow by FY26 end, contingent on NHAI resuming bidding post-December. The mining project (3,500 crore opportunity) is expected to commence execution in 9-12 months. Receivables remain a concern with Rs 758 crore unbilled in irrigation projects, though management sees resolution within 2-3 quarters. Execution of existing order book over 1.5-2 years provides revenue visibility, but new order conversion remains the key risk.
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Guidance to track
- Management targets Rs 5,000-6,000 crore from NHAI projects (expected to resume January 2025) and Rs 3,000-4,000 crore from state government projects including irrigation and EPC road contracts.
- Based on current order book execution pace and expected certification of irrigation unbilled work (Rs 300-350 crore in Q3-Q4), H2 revenues are guided at Rs 800-900 crore.
- Current quarter margins impacted by one-off provisions (Rs 10 crore director remuneration, Rs 10 crore Kerala project provision). Target margin of 13-14% is achievable as execution normalizes.
- Mining project with total value Rs 3,500 crore expected to commence execution in 9-12 months with initial development capex of Rs 90 crore. Revenue recognition will begin after 12-month development period.
Risks flagged
- Analyst from HS HDFC Securities directly questioned whether current period represents the 'worst time ever' for inflows, noting no major awards from Karnataka, Tamil Nadu, UP, or Maharashtra. Management acknowledged this is indeed the worst order inflow environment, validating the concern.
- Irrigation project has Rs 758 crore unbilled receivables with recurring delays despite ministerial assurances. Management admits government payments have been repeatedly postponed, creating cash flow uncertainty.
- NHAI imposed silence period through November 30; management notes that even November tenders may be postponed to January, creating further delay in order conversion pipeline.
- The Rs 1,200 crore MSRDC order (with Patel) awaits land acquisition completion expected by December, with LOC likely in Q4. Analyst directly asked about cancellation/rebid risk—management deflected saying 'no negative news currently.'
Key quotes
- This is the right word which you used is the worst time ever faced by such a situation... state governments are little now coming forward to get on to the orders as of now they're very little orders which they have announced
- Going forward, we are expecting good ordering flow to come... it is only left. So we will try our best to push the case that if we get any good orders in the hand definitely... I don't think something will happen in first half of next year maybe some revenue inflow will come second half of next year itself
- Whatever the orders that are there we will try to execute and complete by this April May... I think we'll be trying to close we are expecting some bonuses also with bonuses we are clearing those issues
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