According to reports from Prabhudas Lilladher, the brokerage has issued a 'HOLD' rating on KNR Constructions with a target price of Rs 148 per share. The recommendation is based on a sum-of-the-parts (SoTP) valuation methodology. As reported by Prabhudas Lilladher, the stock currently trades at a premium valuation of 19x FY28E EPS, which reflects the company's net-cash balance sheet and strong execution track record.
As reported by Prabhudas Lilladher, KNR Constructions is expected to experience muted growth during FY26E–27E following a sustained decline in revenue over the last two years (FY23–25). The company's revenue declined by 21% YoY in Q3FY26 and 38% YoY in 9MFY26, reflecting weak execution capabilities. Despite this decline, the company recorded order inflow of over Rs 40 billion in 9MFY26, equivalent to approximately 2x its annual revenue, bringing the total order book to Rs 88 billion (5.7x TTM revenue) as of Q3. Latest financial data shows the company reported consolidated total income of Rs 756.74 crore in Q3FY26, up 15.71% from the previous quarter but down 22.02% year-on-year. The company achieved net profit after tax of Rs 101.80 crore in the latest quarter.
According to the brokerage report, more than 50% of the backlog remains at an early stage, with meaningful pick-up in execution expected only toward the end of FY27E. The management has provided guidance for near-term EBITDA margin of 9–10%, with a return to 13–14% margins now pushed to FY28. As reported by Prabhudas Lilladher, this improvement is expected as execution intensity improves and legacy cost overhangs taper over time.
As reported by Prabhudas Lilladher, KNR Constructions has executed definitive agreements to monetize part of its HAM (Hybrid Annuity Model) portfolio, which is expected to reduce consolidated net debt from approximately Rs 25 billion to Rs 4 billion. This debt reduction strategy is designed to strengthen the company's balance sheet and improve its financial position going forward.
According to latest market data, KNR Constructions shares are currently trading at Rs 145.68, down 1.43% from the previous close of Rs 146.76. The company has a market capitalization of Rs 4,155.24 crore and operates in the Infrastructure sector. The stock has shown volatility with a 52-week high of Rs 291.60 and 52-week low of Rs 130.28. The company maintains a PE ratio of 8.84 and P/B ratio of 0.92, with promoters holding 48.81% stake in the company.
