KNR Constructions Limited (532942) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to KNR Constructions Limited Q3 and 9 Months FY '26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. K. Venkatram Rao, General Manager, Finance and Accounts from KNR Constructions Limited. Thank you, and over to you, sir.

Good afternoon. Thank you for joining us today on the call to discuss the financial results for Q3 and 9 months FY '26. Along with me, I have Mr. K. Jalandhar Reddy, our Executive Director; and Strategic Growth Advisor, our Investor Relations Advisor. We have uploaded results and investor presentation on the stock exchanges as well as our company website. I hope everyone got an opportunity to go through it. We would like to touch upon our key company updates and industry events, post which we have a question-and-answer session. On the past few quarters, the infrastructure has operated in challenging environment, testing execution capability and balance sheet resilience across the industry. The highway sector, in particular, experienced a slowdown primarily due to moderation in the project awarding by the Ministry. This led to a lower construction and execution activity during the financial year. Reflecting this trend, road project award during 9 months FY '26 remained muted, with the Ministry of Road Transport and Highways and NHAI awarding 1,448 kilometers and 712 kilometers of the project, respectively. Looking ahead, the outlook for project award is improving with NHAI has already invested -- invited bid for projects aggregating to INR 1.5 trillion. Against this backdrop, awarding activity is expected to gather meaningful momentum in the future quarter, supported by the robust order pipeline with a strong bias towards HAM projects followed by BOT and EPC opportunities. Despite the near-term pressure, the outlook for sector remains constructive, supported by renewed policy structure. The union budget provided a strong impetus to the infrastructure sector with capital expenditure increased by 9% to INR 12.2 lakh crores for FY '26-'27, reinforcing the government's continued emphasis on infrastructure-led growth under the Future Ready Bharat initiative. Policy measures are meaningfully focused on driving balanced regional development with great emphasis on Tier 2 and Tier 3 cities, the development of high-speed rail corridor to promote sustainability mobility and Purvodaya initiative aimed at strengthening industrial connectivity along the East Coast. Complementing these measures contributes the introduction of the new infrastructure risk guarantee fund, providing partial credit guarantee to the lenders aim to derisk infrastructure development during the construction and early operation phase, thereby encouraging greater private sector participation. At the same time, sector fundamentals continue to strengthen. FASTag-based toll collection have maintained healthy momentum with volume rise by around 17% year-on-year during October to November quarter and value collection increased by approximately 12.7% year-on-year basis. This sustained growth enhanced the cash flow of operational road assets and accelerated asset monetization by the ministry, which also creates value unlocking opportunities for companies with mature toll profitability. As a result, asset monetization has emerged as key funding lever for NHAI, enabling to generate resources beyond budgetary allocation. Monetization proceeds of approximately INR 35,000 crores to INR 40,000 crores are expected in FY '26 and are intended to support new infrastructure investment while maintaining financial discipline. To sum up, while the sector has navigated a phase of moderation and near-term challenges, the underlying fundamentals remain strong. With improving awarding momentum, support to the budgetary allocation and robust policy framework and growing monetization revenue, the road infrastructure sector is well positioned to enter its next phase of sustainable growth. Now, key updates of the company. The percentage of physical progress as of December 31, 2025 for HAM project is as follows: Ramanattukara to Valanchery, 99.4%, Valanchery to Kappirikkad, 98.3%, Chittoor to Thatchur, around 97.4%, Magadi to Somwarpeth, around 90.1%, Marripudi to Somvarappadu, approximately 64.9%, and Mysore to Kushalnagara Package V, 10%, and Mysore to Kushalnagara Package IV, approximately, 6%. As on December 31, 2025, the company has already invested INR 727 crores out of INR 962 crores equity infusion required for all the HAM project. The additional equity requirement of INR 235 crores to be infused INR 87 crores in FY '26 and around INR 148 crores in FY '27. For this, you can refer to Slide #23 of our investor presentation. On 24 December '25, the company instituted share purchase agreement with Indus Infra Trust, for the proposed sale of its 100% shareholding along with subordinated debt in the following special purpose: KNR Palani Infrastructure Private Limited, KNR Ramagiri, KNR Guruvayur and KNR Ramanattukara. Apart from this transaction the company will invest around INR 566.8 crores in 4 SPV in the form of equity and sub debt against company is expected to receive total proceeds of INR 1,543 crores, which includes INR 1,398 crores sale consideration and around INR 145 crores towards the estimated cash surplus, which will be stream up to the company agreed manner. In November '25, the company received a completion certificate for Avinashi Road project in Tamil Nadu as of 8, October 2025. The company also received a letter of acceptance from the Musi Riverfront Development Corporation Limited for the construction of an iconic bridge across Mir Alam Tank connecting Bangalore National Highway at Shastripuram to Chintalmet under the EPC mode. The project has a contract value of INR 319 crores in construction period of 24 months. Lastly, the CRISIL reviewed the company's long-term bank rating facilities and reaffirm them as a CRISIL AA with Stable outlook while removing the rating from the Rating With Developing Implication. The short-term rating was also reformed as CRISIL A1+, and also removed from Rating Watch with Developing Implications. Now, coming to the order book position. As of December 31, 2025, the company's total order book includes the recently won EPC project stands at INR 8,849 crores. This is divided into 29% for the road project, 19% for irrigation project, 12% for pipeline project, and 30% mining projects. Client wise bifurcation is 84% order book is from the third party and balance 16% is from captive HAM project. The order book percentage is split between state government around 80% and central government 2% and 2% from the other private players. The current order book will be able to execute over a period of around 2 years, excluding mining projects. With the government emphasis on infrastructure development, we anticipate new order award in the coming quarter. We are hereby aiming at order inflow of approximately INR 10,000 crores to INR 12,000 crores by end of September '27, with a mix of projects, like NHAI, irrigation and other state government projects. Now, let move to the Q3 and 9 months FY '26 stand-alone financial performance. The revenue for the quarter stood at INR 585 crores and EBITDA for Q3 FY '26 stood at INR 30 crores and EBITDA margin is 5.2%. Net profit for the quarter was INR 18 crores. For 9 months FY '26 highlights, the revenue for 9 months FY '26 stood at INR 1,561 crores, EBITDA stood at INR 150 crores and margin at 9.6%. Net profit for 9 months FY '26 stood at INR 98 crores. Now, coming to Q3, 9 months '26, consolidated performance. The revenue for the quarter stood at INR 743 crores and EBITDA for Q3 FY '26 stood at INR 160 crores, EBITDA margin is 22.4%, and net profit for the quarter was INR 104 crores. Moving on 9 months FY '26 highlights. The revenues for 9 months FY '26 stood at INR 2,002 crores, EBITDA for 9 months FY '26 stood at INR 542 crores with EBITDA margin at 27.1%. Net profit for 9 months FY '26 stood at INR 332 crores. Now, moving on the stand-alone balance sheet. The company continued to remain strong balance sheet, working capital rate stood at INR 82 crores compared to INR 93 crores as of March '25. The consolidated debt as of 31, March 2025 stood at INR 2,443 crores as compared to INR 1,847 crores as of 31, March 2025. The net debt to equity on consolidated basis, 31, March '25 stand at 0.5x as compared to 0.41x as of 31, March 2024. With this, we can open the floor for question-and-answers.

[Operator Instructions]. Our first question comes from the line of Shravan Shah from Dolat Capital.

Just trying to understand on the revenue and order inflow front. If you can elaborate on that front. I will try to break it in the past. First, in the balance of fourth quarter, how much execution or the revenue we are looking at out of this INR 8,850-odd crore order book? Out of this, in FY '27, how much revenue are we looking at that is first. Then on the order inflow I will come?

Order backlog concerned, what we have very little. In fact, certain portion is from mining. Mining actually to start with, I think we are able to start that in coming second quarter of next financial year or third quarter. Practically, it is possible to make it in third quarter as the forest clearance and Banhardih village Gram Sabha could not be concluded. This is going to further take another 8 to 10 months to start with. This is the situation. What we are left with is only around INR 4,000 crores-plus, which is need to be executed. That needs to be executed within upcoming, say, 2 years' time, whatever we have. The project in Bengaluru-Vijayawada Highway that package could be closed by April, we are expecting that to be taken with the PCOD. Those things will be closed. Ongoing projects will go on for this year. I think you can take around say, INR 2,000 crores could be executed this year, this financial year, I mean to say. Hopefully, there is a good robust expectation to get from NHAI as well. We are even gearing up for upcoming railway works as well high-speed rail also, we have already taken 1 PO for high-speed rail and railways. That is being now taken care. We are looking for place that also. Again, we are also participating in state highway tenders for power projects also we have tried to participate, as well we are also participating in the smelters also we are participating. Apart from that irrigation. We are doing again. There are likely projects to come up from irrigation in Rajasthan as well in Madhya Pradesh, and also from Odisha state. These are now on the board. We will be participating in those tenders. Definitely, we are trying our best to target the tenders and get some order book for the company because it's very, very need of the hours, and we all understand the importance of the thing. we even mind our investors' concerns about this.

Further, just trying to understand, so let's say, break it part. Till now, how much orders that we have bided? Also, if you can specify NHAI or state level and the segment-wise where bid is yet to open, that is one. Second, how much more are we planning to bid before March? Although, I understand the Venkat sir has said that we are looking at INR 10,000 crores, INR 12,000 crores by September. Just trying to break it apart. Also, let's say, how much we are looking at to get before March? If so, in terms of the converting into the revenue in FY '27, how much can be converted out of this into the revenue in FY '27?

Actually, you have asked about the -- how many bids we have placed right now? First, I am going to answer this. There are the projects which we are - Odisha we have participated in some HAM projects. I think it started on 3 days ago. Apart from that, we have also participated in certain tenders I think in Karnataka. Karnataka, a very small bid but okay. Apart from that, we are now -- I think nothing now, other than that. Maharashtra is also there. There are small, INR 600 crores, INR 700 crores projects executed. Almost about INR 7,000 crores to INR 8,000 crores we have quoted as of now, waiting for those results to come down. Apart from that, there is Chennai bid which we have quoted and we are waiting for that results to come out. As court case and all that it is -- court directions are needed for that. Apart from that, we have nothing now, but we will be placing bids in mining. Jharkhand only, there is INR 5,000 crore project, we are now going to participating in that bid. Apart from that, there is around 63 projects therein before March. I can see the list also, scaling from INR 3,000 crores to INR 3,500 also there. Different project types are there. Then, INR 4,000 crores is also there. There are lot of work like that, sir. There are biggest size projects also. Looking forward, I think, even if we are able to succeed in getting 3 bids, 2 bids out of NHAI also will be having enough order in hand. As you all know, the time to take any project to come in, it depends on -- again, depending on the land situation in the project, first thing, and of minimum time from bid stage to the financial closure stage is also you know that, as you know, 7 to 8 months is at least [indiscernible] the mandatory time that can be financial close. These are all the hurdles which we have in this. Apart from that the railways also 26 bids are there, we are trying to participate. Metro, only 1 bid is there, that also we will be participating. Solar project, which we are trying. I think the bids are yet to come from Karnataka as well from Maharashtra also, which we are -- we made an initial level enquiry from the department. There are bids going to come up in March. The bids may happen in April or May. This is the situation. Irrigation, there are 11 bids, which we are targeting.

This irrigation 11 bids, in terms of the value would be how much and railway 26 bids that you said that the value would be how much?

Railway, 26 bids, I will give you [indiscernible].

No issue. Broadly in terms of INR 7,000 crores to INR 8,000 crores bid, which we have already placed where outcome is yet to come. If I just summarize maybe INR 30,000 crores, INR 40,000 crores kind of bid we are planning to put in now. Out of that, we are looking at INR 10,000 crores to INR 12,000-odd crores. Given that, let's say, we do another INR 500 crores execution now, so for FY '27 and the way the bids are then, let's say, if we win that also, how one can look at the execution or the revenue for '27 and particularly for FY '28? Because as you highlighted, once we get this and it will take 6, 8 months to start the execution, then for us to recoup whatever the loss or we have missed on the revenue front that we should be covering in FY '28, so there, how one can look at -- can we look at INR 4,500 crores kind of a revenue in FY '28, is this possible?

Shravan, probably it could be possible.

Right now, order book is INR 8,850 crores. On that actually, mining order is around INR 3,500 crores. If you exclude them, then the order book has come to around INR 5,300 crores. That irrigation is almost INR 1,700 crores there. Out of that, almost INR 800 crores that is unbilled is there. If you remove that INR 800 crores only and new irrigation only, so we left out of around INR 4,300 crores of existing order book. Out of INR 4,300 crores, we can execute around, you can say, INR 2,000 crores actually work in next year, 2027 out of the current order book. If any order is coming and we've been able to execute, that will be added. The current order book, definitely we can able to execute around INR 2,000 crores in FY '27.

Lastly, margin, though this quarter, if you can highlight specific reason why it has significantly fallen. Going forward, once we get this order inflow, can we look at again 13%, 14% EBITDA margin?

Actually to regularize that, I think we hope not exactly this year or FY '27 also, we are not expecting that. I think 2028 should be very bright year for us. That's what I'm thing because all these new projects, whichever we bid and we win and that will launch in the last quarter or third quarter of the upcoming year. Definitely, the execution will be very less in '27. At this stage, it is very difficult to say, but the competitive intensity is also very, very tough here now days. With all that, I think adding to our perception, definitely it should go little bit lower side on this 2027. Maybe it's quite difficult to expect levels 13, 14 levels right now. I think we can expect something near to 9, 10 figures could be deliverable. Because the entire project force, project size, people, everything manpower is completely on and the number of turnover is coming down, so definitely, there is an impact on that actually. People sitting ideal and second, equipment is very good with us and that is not performing to the required level. This is also causing such this thing.

Shravan, with that actually, what sir said, because a lot of projects is coming to final stage. If you see our Guruvayur project, Ramanattukara project, our Nagri project, and Avinashi project, all the project was almost paid off the end. What is happening, there won't be much revenue, but corresponding expenditure will be there or these expenditure is already there. That's why actually this quarter actually, this has come down. As you know that in one of the projects actually due to this construction of viaduct, so around INR 20 crores actually extra additional cost has come in this quarter. These are the main reason actually, why our EBITDA has come down from 5% in spite of our industry level. In the future, actually, next year also will be maybe 9%, 10%, but 2028 onwards, actually once we get all the projects, then definitely, we should try to get our sustainable EBITDA of around 20%.

Our next question comes from the line of Niteen S. Dharmawat from Aurum Capital.

My question is regarding the projects from NHAI. What is the status now? Are these projects coming? Are they putting more projects for bidding? Or is there still a stress in the system? What is the sense you're getting, especially for next financial year?

Yes. Up to March end, we could see almost 63 number bids from NHAI we have selected. I think it's selected only I'm talking about, in which the size of the projects are varying from different sizes almost INR 5,000 crores to INR 6,000 crores, it is varying up to INR 400 crores, also. These are the project sizes we have. Most of them are above INR 1,000 crores. Very few are below INR 500 or so. We have collected in a pattern where it could be our interest or the nearby projects or side-by-side projects, all that are smaller scale also we are booking and trying to bid so that it becomes a bigger portfolio for us. Like that we are targeting, but I think one aspect I can say, because the aggression in the market is very heavy, here. We are also not looking at the margins as we used to look at earlier. Maybe we'll have to dilute 2%, 3% of the margins and then go ahead. That is to be also noted, a few projects, not all, maybe state and all we are very good -- we can get a little EBITDA more, but NHAI is concerned only to make ourselves right now comfortable, we would be bidding a little bit -- a few projects a little bit lesser because the initial level aggression will be there. There, we will -- but the size of the projects are booked more than INR 3,000 crores projects. There we can aim the right margins as we used to get earlier. Definitely, sitting on bigger projects will always be helpful. That's what I'm thinking right now.

Because last few projects that we lost with very small numbers, if I understand it correctly. Maybe some bit of aggression from our side would help. Is that something that we are concluding?

Yes, sir. That's what I'm also looking at, right now. Actually, some healthy bidding only we have to do, but however, we'll have to be a little bit dilute on the margin side so that to keep ourselves first comfortable and then make bid. As a combination, it could be a good one. That's what conceptual thing which we are trying to design.

My second question is about the net debt. With all the deals that we have done recently, what will be the consolidated debt after we receive all the money? Can you highlight that? How it is going to look from the balance sheet perspective when we are bidding for the new projects?

Overall, actually, our debt is consolidated as of December is there around INR 2,400 crores. Out of INR 400 crores, INR 2,400 crores, what are the 4 SPVs that we are doing the monetization, the debt is around INR 2,100 crores. As of date, consolidated as of December will be around INR 300 crores actually. In future, also, the debt of this basically one we have -- the 3 HAM project is going on actually and that only debt will come. You can say by March, actually, our debt will be -- after completion of this divestment program, our debt will be around INR 500 crores on a consolidation basis.

Our next question is from the line of Vaibhav Shah from JM Financial.

You indicated that we will be closing at INR 2,000 crores revenue in FY '26. It indicates a revenue of only INR 450 crores for Q4. There will be a sharp fall in Q-o-Q basis in Q4?

Yes. Because we have -- whatever the existing order book is there, based on that only, we are projecting that we will get around INR 450 crores. Total this year, we are going to achieve around INR 2,000 crores of the turnover.

Next year also INR 2,000 crores?

Next year is based on our existing order book, it will be INR 2,000 crores. If we are getting some good projects actually in the maybe in the first quarter or maybe in Q2 also, then we can try to expedite and we take some, if EPC work is coming, definitely, we can look into HAM project, almost it will take further 8 to 9 months to complete. That's if additional order is coming, definitely that will further add in our revenue.

Worst case number is INR 2,000 crores for next year?

Based on our existing order book.

Secondly, our order inflow in YTD would be somewhere around INR 4,300?

This year will be -- entire 9 months order?

Mining order and 2 EPC projects, including mining.

Mining will be around INR 4,000 crores.

Around INR 4,000 crores. There were 2 orders, right? One was multi-level flyover at Khajaguda and other was iconic bridge across Mir Alam Tank, so that put together is around INR 800 crores.

INR 450 crores, actually. Yes, INR 800 crores, correct.

Mining around INR 3,500 crores. It will be INR 4,300 crores, INR 4,400 crores order inflow?

INR 4,300 crores, this year, yes.

According the media article, there are also one projected called, Thiruvanmiyur to Uthandi HAM project, I think from state government, any update on that? Your L1 in that HAM project?

Chennai project, there is court case. That court case, so the hearing is on 12th of this month. Here, it is very difficult to say anything. However, the department is also under discussion with the committee, there is one committee. They are discussing on how to go about that court case after that.

Court case is regarding?

Actually, one of the bidder, he has disqualified, he has no qualification actually, but he is fighting in the court to qualifying. He is less by so much amount like that. He went to the court. One single bench has cleared in our favor, not favor, in the department favor, because we are no way concerned with this. Generally, he made allegation on that, that he was being lashed. [indiscernible] like that, he made an allegation. For which we have submitted our documentation because we have -- we went to the court and we got nullified that order. After that NHAI has considered with the settlement argument saying that we will do the flyover free of cost and they will not put us in the blacklist. There is no blacklist for us, which we have explain to the court and that we got clear from the single bench. Now he went to the double bench actually. Now double bench hearing is on 12. Once that outcome comes, then we can be able to tell you what happens.

Secondly, any update on Bhandara-Gadchiroli order? Do we expect anything to happen?

This is pending in a long way. We have been extending the bank guarantee and waiting for that because the land acquisition is only concerned, what they're talking about. I think in a month's time, we'll be able to know that they also said we will somehow clear it in March somewhere.

Any possibility of getting LOA sometime in first quarter next year? Or is there a possibility of cancellation of order?

Both the possibilities are there. We really do not know. It's pending with CMO office actually, the CMO. What CM takes a view, that depends on it actually. After lagging on to the project for so many years, so many days, generally, it will not go in cancellation, because if they have to cancel, they would have canceled by now. Because they have canceled the multi-model corridor and recalling the tenders in BOT toll. This is not canceled as of now.

Lastly, one bookkeeping question. Out of your irrigation book of INR 1,700 crores as of December, what would be the unbilled portion?

Around INR 800 crores, INR 816 crores, unbilled.

The revenue potential is only INR 900-odd crores from the irrigation book, incrementally.

Yes. INR 900 crores.

What would be the total unbilled revenue at the company level?

It is around INR 1,300 crores, INR 1,355 crores.

In the water pipeline order, we have seen that the order book is roughly INR 1,033 crores. Also, there is some unbilled portion over there with Indian order?

There is unbilled is there around INR 140 crores unbilled is there, actually.

That also should be reduced as if you want to look at the revenue potential?

It will also reduce, yes. Correct.

Our next question comes from the line of Ritesh Poladia from Girik Capital.

If you can give us some comments on Kaleshwaram Package 3 and Package 4, how much needs to be done more?

Total outstanding receivables on this Package 3 and because package 3, there is no outstanding receivables, whatever the certified bills are there, it is already paid off. With respect of Package 4, around INR 677 crores is the certified bill that is pending for payment. Other than this, unbilled is in both the project is around INR 650 crores. Total around INR 1,430 crores is the amount that we supposed to receive from the government of Telangana for certified and unbilled portion.

Do we need to spend more on this project? Or is this over from our end?

Package 3 is definitely no issue because we are receiving the collection. As far as package 4 is concerned, that left out order book is around INR 100 crores is only -- they are actually in package 4 only. For that actually, we may have to incur expenses. Otherwise, most of the work of package 4 is also completed.

Is there any legal actions we are taking or we are still waiting for government to come back to us?

No, definitely, we are following with the government. As you know, we have already put our appeal to the court also. both Processes we are following actually, both following with the department as well as through court, also. It is taking sometime.

You can give us by what time this can be cleared out? Or is there any chance that we need to write it off?

Definitely, in government side, there is a delay. There is no question of write-off.

Actually, writing-off means such a huge process. Writing-off is big consideration. Second thing, government is not saying that they will not pay the bill and they are really certifying the bill that they want us to do the project and all that, they say this month, that month, it is extending. The thing is hopefully, I'm also thinking partial payments can be recognized in this month, March ended. By March ended, the partial payment should come out. That's what we are thinking because there is a necessity of that project to be commenced somehow. Recently, in CMO assembly also there was a discussion. After that, there is a CMO office, there is a discussion. All the concerned officers were called there and they wanted water for Hyderabad. Hyderabad needs badly water. For that, it is going to be a critical thing for them, unless they come in this project, upcoming years, they cannot give the water properly. To address this, they wanted this project to be speeded up. They said, the department has said that it has been not paid for so many years and the contractor is slowly moving on it, and there is no significant progress, which expected progress is not there. That's what they said. Then CM said, no, we'll pay them, ask them to speed up like that they said. The department approach us and they said, okay, you pay us, we will speed up. That's what we said. It turned out this way. I think hopefully, the heat is coming up from the requirement side. Definitely, they should consider to pay us.

Another question on high-speed rail side. What kind of projects you will be targeting?

Actually, it's a very premature stage, because I think already the high-speed rail network is being done in India. Right now, Hyderabad, Pune and all that, they are supposed to launch on the project side. We are also -- right now, we have recruited one CFO for railways, not for high-speed railways. He's a PE retired person, Mr. Ashok has been taken on the Board now. He is forming the team. Also, he is likely to visit the concern departments in next week. We'll get more information on that side because as budget, they have allocated a lot of fund towards doing this project. Definitely, we have to want our footprint over there, now that we had bad hit these two years onwards. Definitely, we want to have another portfolio where we can keep us in a growth path. That's what our -- conceptually, we are thinking. Because it's the civil construction, we are always the civil construction, only the rail mechanism and all that we need to learn with the design consultants and all that are a lot more people available. Definitely, we can cope up and do work. That's what our feeling. That's what we are starting out. It's a very, very starting phase we star.

Our next question comes from the line of Deepashree Joshi from AMBIT Capital.

For the Canal project, is there a change in scope for the bid cost? Paleru Link Canal, and Sita Rama Lift Irrigation.

That is the new one. Last time it is INR 327 crores. It is the same, only. Order book is the same, only. INR 327 crores only.

My question is because the total irrigation project in September '25, in the order book, the number was around INR 1,500 crores. Now the number has increased to INR 1,700 crores. Just wondering, where the increase has come from?

It is that addition in our Package 4, actually. What is our Package 4 was there. There are some RE has been approved, actually. There was some addition in our Package 4. It is not due to these projects. It is due to our existing packages.

Whatever addition is because of Package 4?

Yes.

When is the Paleru Canal, and other Sita Rama Lift, when is that expected to start?

Actually, because there is some land acquisition issues are there in the project. This now government is sorting out there. It may start in somewhere in next year, Q1 of next year.

Just one more thing. What is the CapEx guidance for '26 and '27?

Definitely, because whatever the existing CapEx are there, that is actually sufficient for us. If we are adding some new projects in sector, so for that CapEx may require. Really that we have to see that when we are getting these project. Based on that, we may go up to around INR 100 crores CapEx next year.

Last question. For the Package 4 and 5, Mysore Packages, what is the expected execution or the revenue that you're expecting in Q4?

For which project?

Package 4, Package 5, Mysore to Kushalnagara.

For these 2 projects, this quarter you are talking? Q4 or next year?

Actually, ma'am, yes, this is concerned. There has been almost -- the new land problems have dropped up there. Because it's a complete greenfield land, which is cutting down entire villages access to the other part of the city. They wanted some service roads, which state government is supposed to do the land acquisition, which NHAI is supposed to construct it. The thing is now because of these issues -- sorry because the main problem is the public, they have already not started any land acquisition as of now by the Karnataka government. Public were angry and they stopped in certain areas. Package 5 concerned, there is land problem. 4 concerned, I think 60%, 65% land is available. Package 5, the land is almost 50%, 55% available, that's it. Within that only, we have to finish. That's what we are planning is that we do a little bit early completion is ensured leaving the gaps of the land issues and balance will be going for completion. I think the issue is taken into PMO purview to pursue that matter. NHAI tried to convince the people. This is under PMO's purview. Maybe it gets solved in another 4, 5 months, what they are saying. 2, 3 months at least. This is the situation. Here, the completion can happen, I think, by May. May, June, we are expecting to do the PCOD for that, targeting. It's not that we are doing.

For Package 4, you will still be able to maybe finish because there are no issues as such. Package 5 is still a concern?

Yes. Concern, but whatever left over land, whatever the land for working is available, that will finish and go for PCOD. As such contract is as a number of gap, which doesn't give you before 6 months, that can be deleted or delink for PCOD. Then again, after that, we will be doing for PCOD to final completion.

Both combined, what do you think will be the revenue from these 2 projects in Q4?

I believe these 2 projects are about EPC is around INR 1200 crores. Roughly, we get around INR 300 crores, INR 350 crores, because already partial is executed now, almost. INR1,100 crores which will pending, so which will come around INR 400 crores, INR 450 crores in next year, FY '27, out of that, we can expect around 40%, 50%, around INR 450 crores, INR 500 crores.

Our next question comes from the line of Bhavin Modi from Anand Rathi.

Just wanted to understand there is a hike in the subcontract expense. It's around INR 216 crores. That has led to the decrease in the EBITDA margin to 5%. Can you just help me what is this cost pertaining to?

Actually, as you know, whatever our pipeline project is there, that is we have given back-to-back to our subcontractor. On this project actually around INR 170 crores actually turnover has happened actually. Out of INR 216 crores, INR 170 crores is pertaining to these subcontractors things are there. That's why subcontract expenses has increased. As you know, the subcontractor project has actually compared to less margin. That is also one of the reason that our total EBITDA has reduced. Other reason as already told you due to completion of our projects in the final stage and one issue in viaduct construction in Ramanathapuram. These things has actually has factors and reduced the EBITDA.

What about the accident on NH66, for which we had to do some of the rework, worth INR 20 crores, INR 25 crores. What is the status with respect to that? We did some settlement.

Yes. Bridge construction is going under, I think almost construction is 100% completed. Super structure is going to complete by this month end maximum. Less than 10 days, I think.

How much money did we spend?

We spent around INR 30 crores actually as of now, around INR 15 crores, INR 20 crores, on that project.

Our next question comes from the line of Vasudev from Nuvama.

I just wanted to know how is the progress going on the irrigation and the pipeline project? How much have we executed in 9 months the pending order book and when do we expect to complete these projects?

Actually, out of this INR 1,033 crores, actually, we already around INR 150 crores work already done in the month of December. In this quarter, actually, Q4, we are expecting around INR 200 crores work in this quarter. Already INR 100 crores billing is there actually that we have to put the bill and balance INR 100 crores in the next month. Definitely, out of INR 1,100 crores, almost around INR 350 crores is going to be executed by this year-end, and maybe next year, we may execute around INR 300 crores to INR 400 crores, balance maybe around INR 400 crores work in pipeline project for the next year.

Just a clarification on the subcontracting expenses, you said INR 170 crores was for irrigation projects, where we haven't received the amount. Revenue has been booked, but cost has been incurred, so that's why margins are low. Is the understanding correct?

Corresponding, because you know, our accounting is based on expenditure basis. Already I have considered in our cost as well as in our revenue to the extent of margin, whatever, our EBITDA margins are there, revenue also consider expenditure also considered. Because being the subcontractor expenditure, we won't get that 13%, 14% EBITDA in that. Generally, subcontractor, back-to-back contractor will have around 3% to 4% margin. That margin only has been built up in the financials.

Just a few bookkeeping questions. If you can help me with your stand-alone debt and cash levels, the segmental revenue split and CapEx that we did in the third quarter?

The stand-alone debt is 0 actually, and there is a cash surplus as of December of INR 80 crores in there on a stand-alone basis.

CapEx in Q3 and the segment revenue split.

We have only one segment, actually. We have only one segment. Whatever the revenue is there, that is only from the one segment. As far as CapEx is concerned, we added just actually INR 5 crores of CapEx actually in this year end.

I was wondering, the total revenue, how much is from the road HAM projects, EPC, irrigation, so if you can give that split for the third quarter?

That percent is there. In HAM, it is 28%, and irrigation is around 17% and back-to-back is around 33%. Our own execution is around 20%.

Our next question is from the line of Dheeraj Kripalani from Avendus Spark.

My question is a follow-up on one of the previous questions. We said, YTD FY '26, we have secured INR 4,300 crores of orders. You said up to March end 63 bids are more to come from NHAI. Can we expect some additional order inflows in 4Q? What will be our target for FY '26, FY '27 order inflows?

Definitely, actually, because this quarter, we are expecting more of a bid from NHAI. Definitely, we are targeting to add actually, some of the order in Q4 from NHAI. Odisha HAM project, we have bided INR 5,000 crores. Definitely, it is on target actually, we want to add something. Total around INR 10,000 crores to INR 12,000 crores, we are targeting by September '26, actually, we should be able to get actually further order inflow of around INR 10,000 crores to INR 12,000 crores by September '26. This is the target. Towards that target, we have already bid almost INR 7,000 crores to INR 8,000 crores we already bid and we have already identified INR30,000crores to INR 40,000 crores order that we are going to bid. That's why we are working on that note.

Our next question is from the line of Shravan Shah from Dolat Capital.

Just a clarification, the further equity to be invested, you said INR 235 crores, but given whatever the adjustment that -- or the rather lower equity for the 4 that we are selling, it should be INR 107 crores that we should be putting additionally.

That's why out of this revised equity out of INR 962 crores, we already put INR 729 crores. Left out is only INR 233 crores of equity in our future HAM project.

I will have a word with you on that. This entire INR 1,543 crores, how much out of that we are likely to receive as a cash by March?

Actually, for 2 projects that is Palani and Ramagiri .That we have planning to complete because we already had applied to the banks for NOC and to the NHAI, also. We are expecting that we should be able to close it. We are targeting to close Palani and Ramagiri that together is coming to around INR 500 crores actually by this March end and balance with Ramanattukara and Guruvayur in first quarter of the next year. That is our target actually to complete this.

The CapEx for this mining that we've got, so when we will be doing the CapEx for that?

Definitely, as you told, there is still forest clearance has not come. Based on that, so maybe in next year end of the year, maybe we have to do some CapEx in line when we see that there is a feasible front is available to install, accordingly, we will make up the required CapEx. We expect that somewhere in Q4 of the next year, we may be able to take some CapEx in that project.

Total CapEx on that project is INR 350-odd crores, if I'm not wrong?

Yes, tentatively yes, INR 350 crores.

Some we will do in 4Q FY '27 and the balance will be in FY '28?

Yes.

Our next question is from the line of Vaibhav Shah from JM Financial.

You indicated that in the Kerala project, the cost which we have to bear of viaduct construction, it would be roughly INR 14-odd crores, INR 15-odd crores in Q4 as well?

Yes, definitely. For Q4 is left out INR 15 crores. That we have included.

That will come in Q4?

That will come in Q4.

Secondly, for the pipeline order, what revenue are we targeting for FY '27?

FY '27, we are targeting around INR 400 crores to INR 450 crores on that project.

As you can complete it in FY '28?

Balance will be in FY '28.

For the new orders which we got, the 2 EPC projects, INR 450 crores and INR 300 crores, what is the time line for those 2 orders? One was 24 months, the Mir Alam bridge. What about the second order?

Both are for 24 months, only.

That should be completed by FY '28, both of them?

Both of them completed in FY '28, yes.

When do we expect to start the execution on them?

Mir Alam is going to start -- already, it is started. Work is started. Mobilization is going on. Filing work has also started. Actually, there is a change in design because of the water is completely in the pond. There is some change of design which we have submitted and that is approved. Detailed design on the basis on that need to be approved. Actually, principle changes were approved. Detailed design need to be made and then it could be got approved. For few foundation, we have started the work actually, where there is some clarity.

The other project?

Other project is started. It is going on. There is some tree cutting problems are there, but they are solving, and then we are going to start.

For the 2 irrigation projects, the total around INR 430 crores value. When do we expect to start the work on both of them? It was quite a bit delayed.

Yes. It may be because there was land acquisition was there. Maybe in Q1 of next year, it will start.

We can do roughly 40-odd percent in a year because there were 24-month projects, both of them.

Definitely, land is available for that, yes, definitely, you can do it around 30% to 40% in the first year.

We have seen some uptick in revenue for the 2 Karnataka HAM projects, Package 4 and Package 5. Combined, what revenue would be expecting for '27 from those 2 projects?

Both 2 projects is maybe around you can say -- actually because we have to -- maybe around INR 500 crores actually, around INR 500 crores on both the projects.

The land issues are sorted in both of them right now?

In one project, land issue are there. One project is okay that we can execute. That's why we consider around 50% of the balance at around INR 450 crores, we can do INR 450 crores to INR 500 crores.

Next, we have a follow-up question from Niteen S. Dharmawat from Aurum Capital.

Just wanted to know what is the receivable amount now from the Telangana projects that we had earlier. What is the recovery cycle we'll be having over here?

Telangana out of INR 870 crores of receivable, around INR 677 crores receivables from the government of Telangana, that is for the Package 4. If we consider unbilled also, total around INR 1,430 crores is there from Irrigation Department from government of Telangana. As far as collection is concerned, actually, as you told that we are trying to put a few pressure. We are expecting some part of collection in the end of the March actually, some part out of this INR 677 crores. That's why we are putting a lot of pressure. That's why we are working towards that.

How much we are expecting almost 50% or less than that, if we can have some guesstimate over there?

Maybe around 50%, we are expecting 50% of the certified bill, whatever the certified bills are there around INR 677 crores. We are expecting somewhere around 50% .

We have not filed any case for this, right? We are still negotiating with the government only?

Case is already filed, generally we are putting pressure also.

As there are no further questions, I would now like to hand the conference over to management for closing comments.

Thank you all for joining us on this call. Please reach out to our Investor Relations Consultant, Strategic Growth Advisors or us directly, should we have any further queries. We can now close the call. Thank you.

Thank you, sir. On behalf of KNR Constructions Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.