KNR Constructions (KNRC IN) – Q3FY26 Result Update – Execution slowdown pushes recovery to FY28 – HOLD
Published on 09 Feb 2026
KNR Constructions (KNRC) is likely to see muted growth during FY26E–27E after a sustained decline in revenue over the last 2 years (FY23–25). Revenue in Q3FY26/9MFY26 declined by 21%/38% YoY, reflecting weak execution. While KNRC recorded order inflow of over Rs40bn in 9MFY26, equivalent to ~2x its annual revenue, lifting the order book to Rs88bn (5.7x TTM revenue) as of Q3, more than 50% of the backlog remains at an early stage, with a meaningful pick-up in execution expected only toward the end of FY27E. The management has guided for near-term EBITDA margin of 9–10%, with a return to 13–14% now pushed to FY28, as execution intensity improves and legacy cost overhangs taper. We have ‘HOLD’ rating with SoTP-based TP of Rs148 per share. KNRC has executed definitive agreements to monetize part of its HAM portfolio, which is expected to reduce consolidated net debt from ~Rs25bn to ~Rs4bn, strengthening the balance sheet. At CMP, the stock trades at a rich 19x FY28E EPS, with the premium reflecting net-cash balance sheet & KNRC’s strong execution track record.
