Brokerage firm Prabhudas Lilladher has maintained a ‘HOLD’ rating on KNR Constructions with a target price of INR 126. The decision follows a weak first quarter for the fiscal year 2027, where project execution delays impacted revenue and profitability. Investors are now watching the company’s ability to ramp up execution for key mining and road projects in the coming quarters.
KNR Constructions saw a muted start to the fiscal year 2027, prompting brokerage firm Prabhudas Lilladher to maintain its 'HOLD' rating on the stock with a target price of INR 126. The analyst view follows a quarterly performance where the infrastructure company faced pressure on both revenue and profit margins, driven by delays in project execution.
In the first quarter ending June 2026, the company reported a standalone revenue decline of approximately 4% year-on-year to INR 587.94 crore. The impact on profitability was more pronounced, with net profit falling by nearly 34.5% compared to the same period last year, reaching INR 80.81 crore. Management has attributed this slowdown primarily to delays in starting key projects, specifically in the Hybrid Annuity Model (HAM) and mining segments, which hampered the pace of work.
Despite the near-term setbacks, the company maintains a strong order book, which stands at INR 87 billion, excluding an additional INR 66 billion worth of orders where the company has been declared the lowest bidder. Management has provided a revenue guidance of INR 2,200–2,300 crore for the full fiscal year 2027. Looking further ahead, the company is banking on a significant ramp-up in execution by FY28, projecting growth of over 30% as new projects like the Kusmunda and Banhardih mining ventures move into their active phases.
For investors, the primary concern lies in the execution timeline and cost management. Intense competition in the infrastructure space is putting pressure on profit margins, and the company has seen an increase in working capital requirements, evidenced by rising debtor days. The stock, which has been trading around INR 134, reflects the market's cautious approach regarding whether the company can meet its projected timelines amidst these industry-wide pressures.
Moving forward, market participants will be monitoring the speed at which the company converts its L1 orders into active project sites. Key milestones to track include the scheduled commissioning of the Kusmunda MDO project in September 2026 and any updates on the company’s capital allocation strategy. The company has also announced a final dividend of INR 0.25 per share, with a record date of September 15, 2026, and continues to explore asset monetization to support cash flow.