1. At a Glance – The Executive Summary That Slaps You Awake
KNR Constructions Ltd is currently trading at ₹148, down nearly 49% over one year, while still flexing a ROCE of 28.6% and ROE of 27.2%. Sounds like a contradiction? Welcome to Indian infra stocks, where execution excellence meets investor trauma.
Market cap sits at ₹4,157 Cr, which is barely 1.4x sales and 0.9x book value. The company just reported Q3 FY26 revenue of ₹743 Cr, down 12.4% YoY, and PAT of ₹103 Cr, which fell off a cliff with a 58.6% YoY decline. Naturally, the stock got smacked.
But before calling it a falling knife, let’s zoom out. KNR has delivered 79 projects across 11 states, executed 8,700+ lane km, owns ₹1,443 Cr worth of equipment, and still maintains one of the strongest margin profiles in the EPC universe.
So why is the market behaving like KNR just forgot how to build roads? Is this a temporary cash-flow tantrum or a structural slowdown? Let’s dig. 🕵️♂️
2. Introduction – From Infra Darling to Market’s Punching Bag
KNR Constructions has been around since 1995, long enough to survive multiple infra cycles, policy U-turns, NHAI payment delays, and the occasional bureaucratic heartburn.
For years, KNR was the “poster boy” of disciplined EPC execution—high margins, early completion bonuses, low promoter drama, and respectable balance-sheet metrics. Investors loved it. Analysts adored it. Mutual funds loaded up.
Then came FY25–FY26, and suddenly:
- Revenue growth slowed
- Working capital ballooned
- PAT numbers started wobbling
- Stock price collapsed like a badly compacted flyover
Yet, operationally, KNR is still completing projects, receiving completion certificates, selling SPVs to InvITs, and
bidding selectively.
So the real question is: is KNR actually broken, or is the market just allergic to temporary pain? Stick around—this one’s interesting.
3. Business Model – WTF Do They Even Do?
At its core, KNR Constructions is an EPC contractor with a strong tilt toward:
- Roads & highways
- Irrigation projects
- Urban infrastructure & pipelines
Execution models include:
- EPC (Engineering, Procurement & Construction) – the cleanest, least risky
- BOT (Build-Operate-Transfer) – capital heavy, patience-testing
- HAM (Hybrid Annuity Model) – part EPC, part annuity, part headache
KNR’s edge has always been in-house execution. Instead of renting machines at inflated rates, they own:
- 1,265 tippers & tankers
- 394 excavators
- Equipment worth ₹1,443 Cr
Translation: lower execution risk, better margins, and faster project completion.
But here’s the catch—owning equipment also means higher depreciation and working capital pressure, which starts hurting when order inflows slow or payments get delayed.
4. Financials Overview – The Numbers That Triggered the Panic
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 743 | 848 | 646 | -12.4% | +15.0% |
| EBITDA | 167 | 256 | 193 | -34.8% | -13.5% |
| PAT | 103 | 248 | 105 | -58.6% | -1.9% |
| EPS (₹) | 3.66 | 8.84 | 3.72 | -58.6% | -1.6% |
Annualised EPS (Q3 Rule):
Average of Q1–Q3 FY26
