KNR Constructions Limited

Industrials — Engineering & Construction · NSE

₹111.80+₹0.17 (+0.15%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of KNR Constructions Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

KNR Constructions Limited, together with its subsidiaries, engages in the construction, engineering, and infrastructure development activities in India.

IndustryEngineering & Construction

SectorIndustrials

Employees3,140

Annual revenue₹2,062 Cr

How does it make money?

Turns over ₹2,062 Cr a year. Of every ₹100 of sales, about ₹21 reaches shareholders as profit, with ₹38 left at the operating level before interest, tax and depreciation. Each of its 3,140 employees supports ₹65.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹65.7 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 10.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.1%

What is the outlook?

13 analysts covering the stock expect revenue to grow about 43.6% and earnings to grow about 81.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+43.6%

Est. earnings growth+81.3%

Analysts13

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -45% while net margin moved +75% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-45%

Margin effect+75%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 18.3% a year
✗ Profit has declined at 1.5% a year
✗ Profit fell 34.6% in the latest year

Quality vs. Valuation

Company Quality

42/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

80/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

8.0x

3Y Median

8.1x

40 monthly readings · mean 10.3x · range 3.2x–24.9x

Sector Median

30.1x

median of 3 sector peers

🟡Currently trading close to its 3y median of 8.1x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 74% below the peer median of 30.1x.

vs. its own history

Fair

8.1x median over 40 months · -1%

vs. sector peers

Cheap

30.1x median of 3 peers · -74%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 24.9% to 37.7% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 16.5% to 8.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 25.2% to 10.0% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 275% over 3 years, from ₹652 Cr to ₹2,444 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 30% against revenue up -45% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 7.3x to 3.5x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 24.9% to 37.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 74% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 30% against revenue up -45%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 16.5% to 8.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 36%✓ 37.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹163 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.5x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✓ 10.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹3,144 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.0x

Cheap

Cheap against the generic band

P/B Ratio

0.63x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹14.03

Profitable

Profitable on a per-share basis

ROE

8.8%

Moderate

Moderate capital efficiency

ROCE

10.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.49x

Low

Conservative leverage

Revenue Growth (YoY)

-4.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

-34.6%

Falling

Profits are shrinking

Dividend Yield

0.22%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹163 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

13.2x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

14.6%

Average

Average margins

Net Margin

14.8%

Good

Strong bottom-line conversion

Current Ratio

4.68

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.44

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

116.4 / 122.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

33.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,778 Cr	₹4,429 Cr	₹3,216 Cr	₹2,062 Cr	-18.3%
EBITDA	₹940 Cr	₹1,192 Cr	₹1,913 Cr	₹777 Cr	-6.1%
EBITDA Margin	24.9%	26.9%	59.5%	37.7%	—
PAT (Net Profit)	₹458 Cr	₹777 Cr	₹1,002 Cr	₹437 Cr	-1.5%
EPS	₹16.29	₹27.64	₹35.62	₹15.54	-1.6%
ROE	16.5%	21.9%	22.1%	8.8%	—
ROCE	25.2%	22.3%	23.0%	10.0%	—
Total Debt	₹652 Cr	₹1,262 Cr	₹1,849 Cr	₹2,444 Cr	+55.3%
Free Cash Flow	₹1,040 Cr	-₹380 Cr	-₹595 Cr	-₹163 Cr	—

🔴 Revenue has shrunk at 18.3% a year over 3 years.

🔴 EBITDA has shrunk at 6.1% a year over 3 years.

🟢 EBITDA Margin has risen from 24.9% to 37.7% over 3 years (+12.8 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (-1.5% a year).

🟡 EPS has been broadly flat over 3 years (-1.6% a year).

🔴 ROE has fallen from 16.5% to 8.8% over 3 years (-7.7 pts).

🔴 ROCE has fallen from 25.2% to 10.0% over 3 years (-15.2 pts).

🔴 Total Debt has grown at 55.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1,040 Cr to -₹163 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,122 Cr

Total Liabilities

₹3,150 Cr

Cash & Equivalents

₹186 Cr

Operating Cash Flow

-₹149 Cr

Capex

-₹14 Cr

Shareholding (proxy)

Institutional Holding

21.5%

Insider Holding

48.8%

Corporate Actions

Dividend Rate

₹0.25

Ex-Dividend Date

15 Sept 2026

Analyst Consensus

Recommendations

3 Buy · 6 Hold · 6 Sell

Target Price (Mean)

₹146.14

+30.7% vs CMP

Target Range

₹110 – ₹260

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

1 positive1 mixed1 negative3 general

KNR Constructions FY26 profit falls 56% to ₹4,368.6 crore

scanx.trade, 15 OctResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

KNRCON Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Compare KNR CONSTRUCTIONS with

Equitymaster, 14 Oct

Pros and Cons of KNR Constructions Share 2026 | Road EPC

Univest, 12 Aug

Neutral KNR Constructions; target of Rs 130: Motilal Oswal

Moneycontrol.com, 02 Jun

KNR Constructions share price jumps over 12% after firm secures ₹1,734 crore NHAI order; check details

Upstox, 29 MarOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Watch Items

Revenue growth is negative (-4.0%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Profitability

WeakGrowth · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑