KNR Constructions shares fell 1.46% to ₹109.50 on the National Stock Exchange after operating margins shrank and revenue contracted across core engineering segments. The stock shed ₹1.62 during the session. Consolidated net profit fell 2.4% year-on-year to ₹102.2 crore for the quarter ended September 30, 2026, down from ₹104.7 crore in the same period last year.
Top-line expansion stalled. Revenue from operations dropped 7.2% to ₹600.2 crore against ₹646.5 crore in the year-ago quarter. Operating profitability took a direct hit. Earnings before interest, tax, depreciation, and amortisation (EBITDA) tumbled 23.5% to ₹147.4 crore from ₹192.6 crore a year earlier. Operating margins contracted 520 basis points, slipping to 24.6% from 29.8% in the September quarter of fiscal 2026.
| Metric | Q2 FY27 | Q2 FY26 | YoY Change (%) |
|---|---|---|---|
| Revenue from Operations | ₹600.2 crore | ₹646.5 crore | -7.2% |
| EBITDA | ₹147.4 crore | ₹192.6 crore | -23.5% |
| EBITDA Margin | 24.6% | 29.8% | -520 bps |
| Consolidated Net Profit | ₹102.2 crore | ₹104.7 crore | -2.4% |
Balance sheet adjustments altered the bottom line. KNR Constructions transferred its entire shareholding in KNR Guruvayur Infra Private Limited to Indus Infra Trust during the quarter for ₹485.86 crore. After adjusting for net assets on the transfer date, the builder booked an exceptional gain of ₹55.48 crore in its consolidated financial results.
It was not the first divestment of the fiscal year. During the June quarter, the company handed over full equity ownership of two operating subsidiaries—KNR Palani Infra Private Limited and KNR Ramagiri Infra Private Limited—to Indus Infra Trust for an aggregate consideration of ₹432.48 crore. That transaction generated an exceptional profit of ₹113.17 crore.
Yet paper adjustments cut both ways. KNR booked a modification loss of ₹96.10 crore under other expenses, triggered by revised estimates of financial assets receivable from the Palani and Ramagiri subsidiaries. According to the regulatory filing, the adjustment stemmed strictly from accounting treatment under Indian Accounting Standards (Ind AS) and carried zero cash flow impact.
Capital remains locked in Telangana. Trade receivables, retention money, and unbilled revenue tied up in the Kaleswaram Package 4 Irrigation Project reached ₹1,380.95 crore as of September 30, 2026. Cash inflows from the state government venture have remained frozen since March 2023.
Payments stopped. Work did not. The contractor stated that it continues site execution under contractual obligations while establishing that it bears no operational fault for project delays. Company management affirmed confidence in recovering all outstanding and future dues, citing underlying contract clauses, internal legal reviews, and ongoing discussions with Telangana state authorities.
Market Context: Working capital cycles across mid-tier highway and irrigation engineering firms remain hostage to state government disbursements, leaving balance sheets dependent on project monetisation and private infrastructure trust transfers to unlock cash.
New project intake provided forward revenue visibility. KNR Constructions held an active order book of ₹11,708.8 crore as of September 30, 2026, spread across road construction, irrigation works, commercial mining, and pipeline packages.
Urban transit additions bolstered that tally during the quarter. The company secured a Letter of Acceptance from the Hyderabad Metropolitan Development Authority to construct an elevated corridor linking the ICCC in Banjara Hills to the Shilpa Layout Flyover Road in Hyderabad. The contract carries an estimated project value of ₹1,396 crore and requires completion within a 24-month execution window. Execution schedules on this urban highway link will determine revenue turnaround speed through the second half of the fiscal year.