Any current/future capex/capital investment/strategic investment?

FY24 capex was around INR 80 crores. For FY25, expected capex is approximately INR 100 to 120 crores, mainly for regular capex. Additional capex will be required if large new projects are secured. Strategic investment plans include partnering with Cube Highways for BOT toll projects, with potential equity participation of 20%-25% initially, with possible exit after project completion. Discussions ongoing with partners like NCC for metro and irrigation projects through MOUs. Exploring new sectors such as irrigation, metro, tunneling, railway, mining, and solar EPC to diversify and de-risk busin

Future growth expectations in sales/revenue/volumes?

FY25 revenue expected to be flat around INR3,955 crores, similar to FY24 levels. Order inflow target for FY25 is INR5,000 to INR6,000 crores, with initial 2-3 months targeting INR2,000 to INR3,000 crores. Growth in FY25 considered "a little bit dull" due to project start delays and external challenges. Execution depends on appointed dates and project mobilization, with some projects yet to start. FY26 expected to see better growth, anticipated to perform well ("touch wood, we'll do great"). Margin guidance for FY25 is 15%-16%, slightly lower than FY24's 17.4%, due to aggressive biddi

Any current/future new fundraising through debt or equity?

The company has a consolidated debt of INR1,220 crores as of March 31, 2024, up from INR610 crores the previous year, with a net debt to equity ratio of 0.34 times. Equity infusion of INR504 crores is planned across FY25 (INR350 crores), FY26 (INR90 crores), and FY27 (INR64 crores) specifically for HAM projects. No explicit mention of new debt raising plans, but the company is managing debt drawing based on cash flow needs, particularly for HAM receivables. Discussions with partners like Cube Highways for BOT toll projects include potential equity commitments around 20-26%, suggesting selectiv

Future growth expectations in earnings/operating earnings/profits/EPS?

FY25 revenue is expected to be flat compared to FY24, around INR3,955 crores. Margins are likely to be lower than FY24’s 17.4%, with guidance of 15%-16% EBITDA margin due to aggressive bidding on new projects. FY25 capex anticipated between INR100-120 crores, dependent on new project awards. Management expects FY25 to be a somewhat dull year with challenges in project starts and execution, targeting to maintain last year's performance. FY26 is expected to show improved execution and growth prospects ("2026 would be, touch wood, we'll do great"). Net profit for FY24 was INR440 crores (adjusted)

Current/ Expected Orderbook/ Pending Orders?

As of March 31, 2024, KNR Constructions has an order book of INR 5,305 crores. This includes 60% EPC road & HAM projects, 19% irrigation, and 21% pipeline projects. Client-wise, 61% is from third-party (mostly state government contracts), 39% from captive consumption. The current order book excludes INR 1,200 crores from two HAM projects without appointed dates; including these, the order book rises to INR 6,505 crores. The order book provides ~1.5 years of execution visibility. Target order inflow for FY25 is INR 5,000 to 6,000 crores, with INR 2,000 to 3,000 crores expected in the next 2-3 m

KNR Constructions LtdQ1 FY25

KNR Constructions Ltd Q1 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹135P/E: 8.6Market Cap: ₹3.7K Cr

Management growth scorecard

Revenue

Category 4

Margin

Category 4

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 4

→FY25 revenue expected to be flat around INR3,955 crores, similar to FY24 levels.
→Order inflow target for FY25 is INR5,000 to INR6,000 crores, with initial 2-3 months targeting INR2,000 to INR3,000 crores.
→Growth in FY25 considered "a little bit dull" due to project start delays and external challenges.
→Execution depends on appointed dates and project mobilization, with some projects yet to start.
→FY26 expected to see better growth, anticipated to perform well ("touch wood, we'll do great").
→Margin guidance for FY25 is 15%-16%, slightly lower than FY24's 17.4%, due to aggressive bidding on new projects.
→Expanded focus into diverse sectors like irrigation, metro, tunneling, railway, mining, and solar for sustainable growth and de-risking.
→BOT toll projects expected as part of growth strategy through partnerships, mainly in southern India.

Margin guidance

Category 4

→FY25 revenue is expected to be flat compared to FY24, around INR3,955 crores.
→Margins are likely to be lower than FY24’s 17.4%, with guidance of 15%-16% EBITDA margin due to aggressive bidding on new projects.
→FY25 capex anticipated between INR100-120 crores, dependent on new project awards.
→Management expects FY25 to be a somewhat dull year with challenges in project starts and execution, targeting to maintain last year's performance.
→FY26 is expected to show improved execution and growth prospects ("2026 would be, touch wood, we'll do great").
→Net profit for FY24 was INR440 crores (adjusted), with the company aiming to sustain profitability amid margin pressures.
→Overall, modest near-term growth with better outlook post-FY25 as larger projects ramp up.

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Fundraise plans

→The company has a consolidated debt of INR1,220 crores as of March 31, 2024, up from INR610 crores the previous year, with a net debt to equity ratio of 0.34 times.
→Equity infusion of INR504 crores is planned across FY25 (INR350 crores), FY26 (INR90 crores), and FY27 (INR64 crores) specifically for HAM projects.
→No explicit mention of new debt raising plans, but the company is managing debt drawing based on cash flow needs, particularly for HAM receivables.
→Discussions with partners like Cube Highways for BOT toll projects include potential equity commitments around 20-26%, suggesting selective equity participation depending on project bidding requirements.
→There’s an emphasis on maintaining a strong balance sheet and cautious capital expenditure, expecting capex around INR100-120 crores in FY25 mainly contingent on new project awards.

Order book

→As of March 31, 2024, KNR Constructions has an order book of INR 5,305 crores.
→This includes 60% EPC road & HAM projects, 19% irrigation, and 21% pipeline projects.
→Client-wise, 61% is from third-party (mostly state government contracts), 39% from captive consumption.
→The current order book excludes INR 1,200 crores from two HAM projects without appointed dates; including these, the order book rises to INR 6,505 crores.
→The order book provides ~1.5 years of execution visibility.
→Target order inflow for FY25 is INR 5,000 to 6,000 crores, with INR 2,000 to 3,000 crores expected in the next 2-3 months.
→Post-election, significant new tendering and awarding activities are anticipated, especially in highways.
→KNR is strategically entering BOT toll projects as minor partner with Cube Highways to increase bidding opportunities.

Capex plans

Yes

→FY24 capex was around INR 80 crores.
→For FY25, expected capex is approximately INR 100 to 120 crores, mainly for regular capex.
→Additional capex will be required if large new projects are secured.
→Strategic investment plans include partnering with Cube Highways for BOT toll projects, with potential equity participation of 20%-25% initially, with possible exit after project completion.
→Discussions ongoing with partners like NCC for metro and irrigation projects through MOUs.
→Exploring new sectors such as irrigation, metro, tunneling, railway, mining, and solar EPC to diversify and de-risk business.
→Focus on selective geographic areas, primarily southern India, with cautious approach to investments outside this region.

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