KNRCON - KNR Constructions Limited Share Price

In the recent earnings call held on May 30, 2025, KNR Constructions Limited provided an optimistic outlook for the upcoming fiscal years. The management highlighted a two-pronged strategy for growth: sustained execution from the existing order book and anticipated new order inflows. They aim for an order inflow of approximately INR 8,000 crores to INR 10,000 crores by the end of FY26, supported by ongoing projects segmented between the National Highways Authority of India (NHAI) and state government contracts.

Key management insights included the following points:

1. Highway Development Initiative: The Ministry of Road Transport and Highways plans to upgrade 25,000 to 30,000 kilometers of two-lane highways to four-lane corridors, with an investment of INR 8 lakh crores to INR 10 lakh crores, which is expected to significantly improve road safety and connectivity.

2. Order Book and Execution: As of March 31, 2025, KNR Constructions' total order book stood at INR 5,052 crores, with expectations to execute between INR 2,500 crores and INR 3,000 crores in FY26 based on the existing projects. Specific project updates showed physical progress on HAM projects, with several nearing completion.

3. Financial Progress and Revenue Expectations: For FY25, standalone revenue was reported at INR 3,359 crores, with a net profit of INR 726 crores reflecting a 47% year-on-year growth. Cash flows from unbilled revenues at INR 968 crores were also noted.

4. Project Risks: Management mentioned a show-cause notice from NHAI regarding a project in Kerala, with potential financial implications being evaluated, although they expressed confidence that the situation would be resolved favorably.

Overall, KNR Constructions is positioning itself for substantial growth driven by public sector investments and ongoing project execution while managing risks effectively.

Question 1: "In terms of unbilled revenue as on March, how much is it?"

Answer: Our unbilled revenue as of March is INR 968 crores.

Question 2: "Out of the order book, how much can we execute in FY26?"

Answer: You are correct; the executable order book is around INR 4,000 crores. We anticipate that we can execute between INR 2,500 to INR 3,000 crores based on our existing order book. However, if we receive new projects towards the end of Q3 or Q4, this figure could potentially increase.

Question 3: "What are we looking at in terms of order inflow and bid pipeline?"

Answer: We aim for an order inflow of approximately INR 8,000 to INR 10,000 crores. From NHAI, we see a bid pipeline of INR 30,000 to INR 40,000 crores, with an additional INR 10,000 to INR 15,000 crores from state projects.

Question 4: "What is the guidance for FY26 in terms of revenue?"

Answer: Based on our existing order book, we can confidently target INR 2,500 to INR 3,000 crores for FY26. However, once we receive new order letters, we will provide a more precise revenue guidance.

Question 5: "What is the status of our irrigation receivables?"

Answer: Our outstanding receivables from irrigation projects stand at approximately INR 790 crores. We are actively following up with the authorities on these dues.

Question 6: "What is the expected cost and impact of the Kerala show cause notice issue?"

Answer: The estimated cost to rectify the Kerala project issue may range from INR 25 to 30 crores. We believe this may not be covered by insurance, but we will explore legal options as necessary.

Question 7: "Can you provide revenue contribution percentages for Q4?"

Answer: For Q4, the revenue contributions were: road hybrid at 46%, irrigation at 19%, EPC at 30%, and back-to-back projects around 4%.

Question 8: "What is the current outstanding irrigation revenue?"

Answer: The current outstanding irrigation revenue totals around INR 790 crores, reaffirming our previous statements about the receivables.

Question 9: "Regarding capex in FY26 and FY27?"

Answer: For FY26, we anticipate a similar capex of around INR 20-30 crores. However, based on our project acquisition in FY27, we expect that capex could increase significantly to INR 100-200 crores.

Question 10: "What is the expected bonus for FY26?"

Answer: We expect to book a bonus of around INR 3 crores from the Chittoor-Thatchur project. This should be recognized in Q1 of FY26, pending the necessary approval.