KNRCON Q3 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹743 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹30 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
KNR Constructions reported a disappointing Q3 FY26 with standalone revenue of ₹585 crore and sharply compressed EBITDA margin of 5.2% (vs ~9.6% YTD), driven by subcontract cost inflation (₹170 crore of ₹216 crore subcontract expense from irrigation back-to-back projects yielding only 3-4% margins), near-completion projects with fixed overhead, and a ₹20 crore additional cost from NH66 viaduct construction. The order book stands at ₹8,849 crore, but execution visibility is weak with FY27 revenue guidance maintained at only ₹2,000 crore based on existing projects—excluding the delayed 3,500 crore mining project. The company targets ₹10,000-12,000 crore order inflows by September 2027, requiring aggressive bidding in NHAI and state projects amid intense competitive pressure requiring 2-3% margin dilution. Management expects FY28 to be "very bright" with potential revenue of ₹4,500 crore if new orders materialize. The asset monetization of 4 HAM SPVs for ₹1,543 crore will reduce consolidated debt to ~₹500 crore post-close.
Colored figures show movement against the previous available record.
Guidance to track
- Based on existing executable order book of ₹4,300 crore (excluding delayed mining). Q4 FY26 expected to add only ~₹450 crore, implying sharp sequential decline from Q3.
- Management expects recovery to ₹4,500 crore if new project awards materialize in FY27, given 6-8 months from award to execution start.
- ₹7,000-8,000 crore already bid (outcome awaited); ₹30,000-40,000 crore identified for future bidding across NHAI, state highways, irrigation, railways, and metro.
- FY27 margins to remain compressed at 9-10% due to low execution (projects launching in Q3-Q4). FY28 expected to normalize to ~13% with full-year contribution from new projects.
Risks flagged
- A rival bidder challenged KNR's qualification in court; single bench ruled in favor of the department. KNR received no-blacklist assurance. Government bench hearing scheduled for 12th. Project award remains blocked pending court outcome.
- LOA for Bari project (NHAI) has been pending for extended period due to land acquisition issues at CMO level. Management acknowledges both continuation and cancellation are possible, with clarity expected in March 2026.
- Management explicitly stated they may need to dilute margins by 2-3% to remain competitive in NHAI bidding. This represents a structural shift in pricing power, particularly impacting FY27 execution visibility.
- ₹170 crore of ₹216 crore subcontract expense in Q3 related to irrigation back-to-back projects yielding only 3-4% margins vs company's typical 13-14%. This explains the sharp margin compression to 5.2%.
Key quotes
- The competitive intensity is also very very tough nowadays... we may have to dilute two 3% of the margins and then go ahead.
- 2028 onwards actually this we get all the project and definitely we should try to get our sustainable EBITDA of around 13%.
- So 2027 out of the current order book and if any order is coming and we can able to execute that will be added. This current order book definitely we can able to execute around 2,000 crores in 2027.
- We definitely we are also not looking at the margins as we used to look at earlier. Maybe we'll have to dilute 2-3% of the margins and then go ahead.
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