Ladies and gentlemen, good day and welcome to KNR Constructions Limited Q3 and FY 2025 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. K. Venkata Ram Rao, General Manager, Finance and Accounts, KNR Constructions Limited. Thank you, and over to you, sir.
Yeah, thank you. Good morning. Thank you for joining us today on the call to discuss the financial results for the Q3 and nine-month FY 2025. Along with me, I have Mr. K. Jalandhar Reddy, Executive Director and Strategic Growth Adviser, our Investor Relations Adviser. We have uploaded results and the investor presentation on the stock exchanges as well as on our company website. I hope everyone got an opportunity to go through it. We would like to touch upon the key company updates and industry events after which we will have a question-and-answer session. The recent Union Budget for FY 2025-2026 reaffirmed the government's strong commitment to the infrastructure development with budgetary allocation of INR 2.87 trillion for the Ministry of Road Transport and Highways. This substantial investment is poised to accelerate road development, enhance connectivity, and strengthen our transport network, paving the way for a more robust and resilient economy.
Although the first nine months of FY 2025 witnessed a slowdown due to macroeconomic factors, with approximately 5,853 kilometers of the roads constructed, the sector continued to demonstrate a strong foundation for growth with a large chunk of projects already to be awarded. The sector has already gained significant traction with the second quarter averaging around 600 kilometers of the projects awarded. The momentum has further increased in Q3 quarter also. Additionally, the North is prioritizing corridor-based approach, which will enhance user convenience and improve logistic efficiency. As of December 2024, North has operationalized 4,693 kilometers of the highways' speed corridors with a target to reach 4,827 kilometers by the end of FY 2025. Looking ahead, India's ambition vision of 2047 aims to reshape the national infrastructure landscape.
Under this long-term roadmap, the government is set to approve a series of future highway projects, ensuring the seamless expansion of the national highway network. Notably, project awards are progressing at a steady and comfortable pace, reflecting continued momentum in the sector. This increased focus on infrastructure will not only boost construction activity but also improve logistic efficiency, create employment opportunity, and drive economic progress. With this strategic development, India's road infrastructure sector remains a cornerstone for national growth and connectivity. Now, come to the key update of the company. The percentage of physical progress as of December 31, 2024, for the HAM project is as follows: Magadi to Somwarpet, approximately 88% completed; Ramanattukara to Valanchery, approximately 90% completed; Valanchery to Kappirikkad, approximately 86%; Chittoor to Thatchur, approximately 84%; and Marripudi to Somavarappadu, 23%.
As of December 31, 2024, the company has already invested INR 589 crores out of the INR 900 crores revised equity requirement for all the HAM projects. The additional requirement of INR 401 crores to be infused as INR 108 crores in 2025, INR205 crores in FY 2026, and INR 88 crores in FY 2027. You can refer to the slide number 23 of the investor presentation for the detail on each HAM projects.
In January, the company received a letter of acceptance for two irrigation projects in the state of Telangana. Both projects together account for INR 429 crores of our share of revenue. Now, coming to the order book position. As of December 31, 2024, the company's total order book stands at INR 3,880 crores. This is divided in 46% for the EPC road project and HAM project, 26% for the irrigation project, and remaining 28% from pipeline project.
Company-wide valuation is 71% of order book is from the third-party client and balance 29% for captive HAM project. The third-party order book percentage is further split as state government 58%, whereas 10% is the central government, and balance 3% from the other private player. It is to be noted that this order book does not account for the two HAM projects totaling to INR 1,200 crores as the appointed date is yet to be received. Additionally, with the excluded two irrigation projects awarded in January 2025, value at INR 429 crores. Including these, the total order book would be INR 5,517 crores. The current order book will be executed over a period of one and a half to two years. With the government emphasis on the infrastructure development, we anticipate new orders awarded in the coming quarter.
We are aiming for an order flow of approximately INR5,000 to INR 6,000 crores to INR 8,000 crores by the end of September 2025. Before discussing the financial figure, I would like to highlight that during the quarter, the company received an arbitration claim from one of our associates, that is Patel KNR Heavy Infrastructures Limited. This includes INR35.6 crores recorded under revenue from operation and INR 103.5 crores as interest on such claim, that is reflected in other income. The related expenses of INR 1.3 crores have been included in other expenses, and resultant tax of INR 34.6 crores is accounted under current tax. Now, let me take you through the Q3 and nine-month FY 2025 standalone financial performance, followed by the consolidated performance. I will start with the quarterly highlights first. The revenue for the quarter stood at INR 743 crores.
EBITDA for Q3 FY 2023 grown by 3% to INR 151 crores as compared to INR 147 crores in Q3 FY 2024. EBITDA margin is at 20.4%. Net profit for the quarter was INR 182 crores, while it was to INR 86 crores in Q3 FY 2024, registering a growth of 113% year-on-year. Now, coming to nine-month FY 2025 highlights. Revenue for nine-month FY 2025 is stood at INR 2,507 crores. EBITDA for nine-month FY 2025 grew by 4% to INR 508 crores as compared to INR 487 crores in nine-month FY 2025. EBITDA margin in nine-month FY 2025 stood at 20.3%. Net profit for nine-month FY 2025 was INR 650 crores as compared to INR 296 crores in nine-month FY 2025. Now, coming to the consolidated financial performance, I will start with the quarterly highlight first. The revenue for the quarter is stood at INR 848 crores.
EBITDA came in INR 256 crores in Q3 FY 2025, while it was INR 226 crores in Q3 FY 2024, a growth of 13% year-on-year. EBITDA margin in the current quarter stood at 30.1%. Profit after tax stood at INR 248 crores in FY 2025, while it was INR 136 crores in Q3 FY 2024, a growth of 83%. So moving to nine-month FY 2025 highlights, the revenue for nine-month FY 2025 grew by 25% year-on-year to INR 3,778 crores.
EBITDA for nine-month FY 2025 was INR 1,404 crores as compared to INR 673 crores in nine-month FY 2024, registering a 109% growth. EBITDA margin for nine-month FY 2025 stood at 37.2%. Net profit grew by 142% year-on-year to INR 994 crores. Now, moving on the standalone balance sheet, the company continued to remain a strong balance sheet. Working days stood at 69 days compared to 71 days as of September 24.
The consolidated debt as of December 2024 is INR 14,086 crores as compared to INR 1,220 crores as of March 31, 2024. The net debt to the equity on consolidated basis as of December is stood at 0.33 compared to 0.3% as of March 2024. With this, we can open the floor for question and answer. Yeah.
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Hi. Thank you, sir. Really, sir, I just wanted to understand primarily because for us, the concern is the order.
Yeah. Are you able to hear me?
Hello.
Are you able to hear me?
Go ahead with the questions.
Yeah, I am unmuted. Are you able to hear me?
We'll move on to the next participant. The next question is from the line of Ravin Naredi from Naredi Investments. Please go ahead.
Hello, Jalandhar Reddy. It is so far a good result. We received so many arbitration claims this year. How many more in pipeline? Can you describe this?
Sir, actually, good morning, everybody. The claims concern, there is not much that are pending as of now. I think due to Vivad se Vishwas scheme, we could get settled with all other claims. And there are very minor claims ahead. One Penchalakona-Yerpedu project , there is a claim about, say, INR 15 crore, whose receivables through this Vivad se Vishwas may be INR 11 crore and all. That's all the claims for this thing concerned. And there are a couple of other claims in some HAM model projects. And the Madurai to Ramanathapuram project, there is a claim. And there is a claim in around INR 300 crore, I think, in Madurai-Ramanathapuram. And this Dindigul-Bangalore package, there is Coimbatore to Pollachi, that is. That project also has about, say, INR 150 crore plus claims. But these are the arbitration is still yet to commence.
I think those claims were launched, and we have asked for some conciliation committee. There is a conciliation committee in NHAI for settlement of these claims. If they differ with our argument, then probably we would go for another forum like go to arbitration, and then it will start that channel.
Okay. Thank you, sir, and we have INR 5,200 crore 12 months top line, while we have only INR 5,500 crore value of contract in hand, which is equal to one year. Will you comment on this?
Yeah. Actually, as one and a half year onwards, there is no significant orders which have been received by the company because there is a big slowdown in NHAI, who is the major client in our industry to get the jobs from highway and HAM or toll model projects. So those were completely. I think there were tenders, but not in large numbers like they used to happen in every year. So the rally was very small, and the aggression in the market was very heavy. Some tenders went at 20%-25%. HAM model 20%-25%, it is unimaginable. Certain tenders have gone in that way. So there is aggression in the market a little bit. But there is a huge pipeline which is there in NHAI's website, as you can also see it.
We have keenly studied certain around 70-80 projects we have studied as of now, so we were making our moves as and when these tenders come up, we can put our bid. There's a lot of time which we've got, so there's a keen study being done when at most design care was taken, almost all the care was taken. Hopefully, we should be able to get out with this. Apart from this, the highway NHAI divisions, we are also participating through state government projects in highway sectors like Tamil Nadu is coming out with few projects, and Karnataka is coming out with few projects, and irrigation projects are also in a major way that are coming from AP projects, which we are focusing now.
And in Rajasthan, there is an interesting thing that we have in HAM model irrigation projects, which are also there on the board, which we are preparing our bids to submit over there. And apart from that, urban infrastructure projects are coming up in large scale in Tamil Nadu, as well in Telangana, as well in Andhra Pradesh also. So those areas also like flyovers and all other many infrastructure development projects in the cities and all that coming up, which we are also focusing there. Apart from that, recently, we have placed our bids in open mining operation contracts. So those areas also we have given our bids. And we continue to go on them. And certain other care also has been taken.
There are large-scale projects like INR 5,000 crore, INR 8,000 crore, INR 7,000 crore, the size of projects which are coming out on BOT toll model, for which I think we have spoken to Adani, and we have submitted Agra-Gwalior bid with EPC bid to them, so hopefully, if it goes well, then they would get tenders, we would get the EPC. That's kind of an arrangement which we have got. Apart from that, we are also thinking to give some certain bids where Cube is also participating in toll bids, so there also, we would like to go, so there is quite an interest which we are capturing. I think extensive efforts and hard efforts are being made by us to get enough order book in hand. Our target is to have around INR 8,000 minimum in coming two, three months' time.
By 31st March, we might receive some NHAI contract?
Actually, we may be bidding, but I don't think the bids will get opened by that sooner. Now, we submit the bid. It is taking almost 45-50 days to open it also. So probably most of the bids could be submitted. I think most of the tenders which may happen in March. So those tenders, we will be definitely placing our bids.
And what is the status of our net assumption from Telangana government?
Actually, we have given a court case also. As a safe mistake, I have given. But we have even spoken. The department had a serious meeting with us, stating that, "When do you pay us?" Then the department and ministry, Minister Uttam Kumar Reddy , the Minister of Irrigation in Telangana, who also spoke to us, saying that this Link 5 project, which is in the pump, we were doing pump to a pump house project, which comes under Link 5 of that Kaleshwaram thing. So that is with the bank funding. So that gets started and they are trying to solve, but I think it is not solved as of now. So we were expecting our this thing. Either you take in the budget or you get that result so that we get paid. Otherwise, so much payment, we cannot wait.
They were asking us to withdraw the case and all. We said, "No, we cannot withdraw as you have delayed beyond our expectations." Mostly one and a half years, it is delayed. So the interest part itself is becoming huge in this. So we said, "Okay, let the interest also be collected. If you pay the principal, we will continue to fight for the interest part, which we have clarified with the department.
Okay. So how much amount due today is on today?
Certified is INR 577 crores for package for bills are certified by them, actually, that we have to get the money immediately. Around INR 400 crores, actually, we did the work, but bill has yet to be certified. Put together around INR 977 crores is there in that particular project.
In the last six months, we do not receive any single pipe?
For this project, we have not received, sir. For another project, one Vattem project was there that we received INR 37 crores in the month of January, actually.
Sir, Jalandhar Reddy, you are such a senior person in the industry, and we hope definitely you will do something for the company, and we wish all the best.
Yes, yes, sir. Thank you very much, sir. Thanks for having trust in us, and we will try our best in this.
Thank you. We have our next question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Hi, sir. Sir, are you able to hear me now?
I think you are on mute.
Mr. Shravan Shah, please unmute your line to ask questions.
Sir, are you able to hear me now?
Not audible.
Mr. Shravan, you are not audible.
Sir, I think I am already unmuted.
Mr. Shravan, we request you to rejoin. We have our next question from the line of Jainam Jain from ICICI Securities. Please go ahead.
Thank you for the opportunity. So, sir, what are the margin and revenue and order inflow guidance for FY 2026?
Mr. Jainam, please unmute your line to ask questions.
Hello. Am I audible right now? Hello.
Yes, sir. Please go ahead.
Yeah. So, sir, my first question is, what would be a margin revenue and order inflow guidance for FY 2026?
Actually, sir, FR26 concerned, I think the projection is we are expecting little lesser projections only from this year as the order book is very less, and it is coming to an end also. And certain where we can do the job in irrigation and all, there is a little bit problem in payments. So that's how we expect around 10%-15%, which we are expecting in the top line. But bottom line concerned, it may be at par or a little bit good only.
Sorry, what did you say for the bottom line?
Actually, it could be at par because the turnover is anyhow coming down. But since the claims and all were received, so okay, a face saving will be there in that.
Okay. So we will be waiting. I've been meeting right now. We are roughly around 16%-17%.
Yeah, I think. Yes, sir. I think.
Sir, we will be somewhere between around 15%. Definitely we could be able to achieve, sir.
Okay. And what about order inflow? How are we seeing the order inflow for next year?
Order inflow concerns, sir, that we have just spoken about it. That we are seriously focusing on various sectors like the highways and irrigation projects as well. We are also focusing on mining operation projects. Apart from that, there are a lot of state government projects which we are focusing there. Also, we expect jobs to come down. And apart from that, we are also sorting partners who can do the concession, and they can give us EPC model like Adani and this Cube Highways and all, which we have spoken and MOUs are under. I think MOUs done with Adani. So certain progress is there in that side also. So there are serious efforts which we are also keeping on it, sir, as the order book is a serious concern to our company as of now. So definitely, we try to do a better job here.
I'm also targeting about, say, near about INR 10,000 crore order book inflow coming two, three, four months' time.
Okay. All right. And so.
Sorry to interrupt, Jainam sir. We are unable to hear you.
Hello? I'm audible right now?
Yes. Please go ahead.
Yeah. So sir, coming to the order pipeline, what is the amount of project that we have quoted for right now? And how much we are expecting to win within the March month itself for the tenders which will be opening before the March?
I think there is no doubt that this thing is there now because the tenders have still not yet happened, major tenders, which we are focusing on them. So we expect March, we expect a little bit lesser figures because if at all any state government tenders that happens, then there is a chance of winning tenders. Otherwise, NHAI concerned, they may get open in if even March, if there is a big rally in March also, they get open in April or May. So kind of that. So another three months to four months' time, reasonably, we should be having the order in hand. That is what we are targeting.
Okay, sir. And sir, coming to the working capital, can you just give some numbers on the unbilled revenue, mobilization advance, inventory data and creditor's number as of now, as of December 24?
Yes. As far as the debt is concerned, debt is INR 1,221 crores of the debt. And unbilled revenue is INR 1,113 crores. And retention is INR 300 crores. And mobilization advance is INR 30 crores.
Okay. And sir, what about inventory and creditors?
Inventory is INR 196 crores, and creditors' is INR 332 crores.
Okay, sir. And sir.
Voice is not audible, sir.
Hello? I'm audible right now?
Now it is better. Yeah.
So sir, what's the issue with the Kushalnagar project? We achieved the financial close of 1.5 years back, and still we haven't achieved the appointed date for that. How are we seeing the progress? How are we seeing it progressing further?
So the Mysuru projects, you are talking about?
Yes.
Yeah. Yeah. Kushalnagar. Yes. Actually, sir, that they have received the clearances from the Forest Department to go ahead. So there is a land now being handed over to the concessionaire. I think in a week's time, we shall be commencing those projects.
In the week time. Okay.
Yes, sir. Actually, the package five has full-length land, but package four is not that much, not to the expected level like 80% is there. But still, NHAI is pushing us to take. And since I also need some break, so at least to run the projects, I will need the job in hand. So I'm also cooperating NHAI to go ahead.
All right, sir. Okay. That answers my question. Thank you so much and all the best.
Thank you. Ladies and gentlemen, in order to ensure that management is able to take questions from all participants in the conference, please restrict yourself to two questions per participant. I repeat, please restrict yourself to only two questions per participant. We have our next question from the line of Lokesh Manik from Vallum Capital. Please go ahead.
Yes. Hi, good afternoon. My first question was on the EBITDA margins. So they are a little elevated from what we have guided at about 17%. So just some clarification on whether this is due to many of the projects nearing the end in the portfolio mix. Would that be the reason, or you are seeing lower raw material prices coming down?
Definitely, sir. Most of the projects is there. But as our road projects are there, almost 80% is completed. The project on the fag end. And also that irrigation, which is our very good contribution in EBITDA, their portion of the total turnover is also reducing. So basically, these are the main reason, actually. That's why there is a little bit lower in our EBITDA.
Fair enough. Fair enough. So my second question was on your previous comment on package four. So although we do appreciate your very risk averse, but do you see any risk on that front because you said they are just 80% of the land acquisition and not towards your comfort level? But also given the reputation of the customer, that is NHAI, right? So are you seeing any risk in terms of that front? Going down, there may be some bottlenecks towards once you start the project or commence the project.
Generally, sir, as per the contract condition, if 80% land is there, we will take the Appointed Date and balance 20% while execution of the project, actually. So it will come, actually. And as per concession agreement, whatever land they will hand over within 180 days from the Appointed Date, on that land only, we have to do the entire work. And on that basis, they will give the PCOD. So we are very much clear that as per the agreement, if whatever land is there as an Appointed Date plus six months, we have to execute the work on that land, and we have to get the PCOD. So really, we are not facing much issue in these because we have so far completed, actually, almost five HAM projects, and still four are there. So we have seen that.
That issue has not come, actually, in any of our projects as of now.
Right. Right. Any update on the metro projects where you are planning to diversify?
Sir, actually, metro projects concern the tenders which we have quoted. We have lost the tenders. I think we are waiting for upcoming tenders.
The railways?
That is in the railways also, we have lost tenders. We didn't get anything, but we will continue to focus on this.
That's it from my side, sir. Thank you so much.
Yeah. Thank you.
Thank you. A reminder to all participants to restrict yourself to only two questions. The next question is from the line of Bhavin from Anand Rathi Institutional Equities. Please go ahead.
Yeah. Hello, sir. Thank you for the opportunity. So I just wanted to understand, sir, what is the probability of how do you feel about winning the MDO projects, like mining projects? I believe this is a different set of projects from what we do earlier. So any light on that?
Hello?
Yeah. Hello, sir. Can you hear me?
Yes. Okay. Pardon me, sir.
Yeah. Can you hear me?
Yeah. Please repeat. Bhavin, you tell. Yeah.
Yeah. Yeah, sir. Sir, thank you for this opportunity. Just wanted to get your insights that we have placed bids for the MDO projects, mining projects. So what do you feel is the chances of winning probability as our background projects are a bit different from MDO projects?
Sir, actually, these projects, many of the operation projects that we have evaluated carefully and whatever the price that has come, we put it down. Just, it's a first project. So I don't have a big feel that what happens there and all. But regularly, it's a complete missionary-oriented project. And the operations are likely to continue for five years. So we expect a good outcome, but EBITDA is not as good as highways or irrigation kind of that.
Right, sir. Right. Right. And sir, second thing, as a company's policy, we try to maintain the EBITDA margins. We generally do not compromise on that. So when you say you previously mentioned there is a lot of competition in NHAI projects, so then what is the strategy the company is adopting? We will be directly bidding for the NHAI projects, or we will then go, we will have a back-to-back arrangement of EPC projects to maintain our margins. So how are we strategizing?
Actually, sir, toll project concerned, I'm going as an EPC player.
Right.
HAM projects continue to be actually. I was even qualifying for INR 5,000 crore projects in these. So definitely, the large-scale projects also there in the bid. Like Assam, there is around INR 5,200 crore project was there. So we are all focusing on such projects. So the ticket size this time, luckily, even PMO is reviewed last year. And they said to go for large-scale projects only because the quality is deteriorating with the small-scale contractors and all. So that was the call taken by the NHAI.
Okay. So just wanted to know, out of curiosity, what is our limit for the HAM project? How much is the cut-off? Are we able to bid for 3,000 plus projects, 3,000 crore plus projects? Or what is the limit? We are not eligible for 5,000 crore plus project.
Actually, yes, sir. We are eligible. We are eligible for INR 5,000 crore project means all such categories which are there, they can be qualified, right?
Okay. And sir, just last question, sir. We have experience in the BOT toll project side previously. And seeing the government preference of PPP, so shouldn't we strategize to participate in the BOT toll projects? I understand there's a traffic risk involved, but.
Yeah. Right question, sir. I got the question. Most of the bids are coming on these greenfield highway projects, sir. The predictions are not so encouraging. I don't think some sort of confusions are there. Wherever I'm very clear with the traffic growth and all, there I'll try to participate on my own also.
Okay, sir.
As we have enough equity in hand, we can focus, sir, but our equity is very precious, so we want to put in good ones, not in any other.
Right. Right. Got it. And sir, last thing about the monetization plan. We were under discussion, and even share purchase subscription agreement was in the advanced stage. So what is the update on that for the four matured assets?
Yeah. Sir, this SPA is on discussion, sir. So we expect that we should be able to sign the SPA for these four assets by end of Q1. And after that, actually, we have to go because Palani project, we got the PCOD. So immediately after that, we'll go for NHAI and lenders approval. So we expect that by end of June, actually, we should be able to monetize our one asset, Palani. And other three assets, we are expecting PCOD by March. So maybe by December end, actually, we should monetize the other three assets.
Okay. Okay, sir. Sir, I've got a few balanced questions. So I will join back the queue and come back again.
Yeah. Thank you. Thank you.
Yeah. Thank you, sir.
Thank you. We have our next question from the line of Vaibhav Shah from JM Financial. Please go ahead.
Sir, I called late. So sorry if the questions are repeated. So firstly, you mentioned that 10%-15% revenue decline. So that is for FY 2025, right?
FY 2025, yeah.
Yeah, and for FY 2026, what are we targeting?
Because these are the projects when we are going to receive based on that. Actually, FY 2026 revenue will be there. But if we get, suppose, any HAM project, it is taking almost one year to start that project. Even EPC project also, it will take at least six months to start. So definitely, 26 also, we are also thinking that if we could be able to at least power something INR 3,500-4,000 crores. Actually, we are targeted 26. But definitely, 27 will be the good because a lot of the projects what we are targeting in Q1 and Q2 of this FY 2026. So 25 will be around 10%-15% degrowth, and 26 will be somewhere INR 3,500-4,000 crores.
So, secondly, on order inflow side, we have received around INR 430-odd crores in year to date. So for FY 2025, what will be our guidance and stream for FY 2026 if you can just split in annual terms?
That's why we thought FY 2025 now time is not only one and a half months is there. So that's why our ED said that we are targeting between 8,000-10,000 crores order book in next three to four months. So because March is almost one and a half months, so we are not very much sure. But target is that between three to four months, we should get at least 8,000-10,000 crores of order book.
So by Q1, we should get around INR 8,000-10,000 crores of new inflows?
Yeah. Yes, sir. Yeah. That's we are targeting it.
Okay. And sir, secondly, on the HAMs, so when do we expect to receive the ADs for both the HAMs?
Actually, sir, it's already explained for project five, actually, that we are expecting in a week's time, actually. So maybe you can say around 10 days, actually, we'll get. And the other one is maybe by the end of March.
But execution would largely start in next year only in Q1?
This will start. First, package five will start our execution, actually. Package four may take some time.
Okay. And sir, you mentioned that package four certified and unbilled around 977 crores. And what about package three? So total receivables would be how much?
Package three, actually, total package three will be around 120 crores is there. Package three. So total irrigation receivables, including unbilled as of date, is around 1,200 crores is there. Out of that, 600 crores is certified, and the balance 600 is uncertified.
And sir, lastly, on the irrigation side, so our order book is roughly INR 990 crores. It is constant for the last couple of quarters. So actual revenue potential would be somewhere around 400-odd crores incrementally?
It will be incrementally around INR 500 crores will be there. That's it.
And sir, lastly, in terms of EBITDA margins, it should be around 15%-16%, 15.5% going ahead?
But that's because now turnover is depleting. So we expect that EBITDA starts in the range of around 15%, actually. Between 15% to 15.5% will be there.
Okay. Okay. Thank you, sir. Those are my questions.
Yeah. Yeah. Thank you.
Thank you. Ladies and gentlemen, please restrict yourself to two questions per participant only. I repeat, please restrict yourself to two questions per participant only. We have our next question from the line of Faisal Hawa from H.G. Hawa. Please go ahead.
Sir, there's a big drop in employee expense as well as finance costs, even quarter on quarter. Finance costs have halved, and employee costs have gone down by 25%. What is the key reason for that? Second is, sir.
Finance costs, actually, because in last quarter, actually, we have received a lot of some of the claims, actually. For that, finance expenses also, it is included in the finance cost. So that was included in finance costs of last year. And as far as employee expenses concerned, because there was variable pay, actually. We paid in the last quarter, Q2, of our management. So that variable pay is only one time into. That's why it was there more in Q2, but not there in Q3.
And sir, what do we expect to gain from this in-hand portfolio that we are going to sell these four projects? So I believe that one project will be sold off by June, and the rest of the three will be sold off by December. So what is the gain on the equity that we have invested? What is the gain that we are expecting on them? And that's the question.
We are also discussing with that, but gain will be definitely very good, actually. It will be the we can say, but it will be very good price, actually. Definitely better than what the deal we did, actually, earlier.
And sir, what is it a right statement to make, say that suppose in one year's time, we get about INR 1,200 crores irrigation dues from Telangana government, and we make another, say, from the equity portfolio, we make another similar amount? So is it a right statement to make that we will be having almost INR 2,400 crores free cash flow in one year from now?
But we have to invest in our equity also. 400 crores is there. We have to invest in our equity contribution. We have to do the CapEx for our future projects.
Sir, company will also earn some money in the next four quarters, some more money from existing orders and revenue.
So that's your definite. Your statement is to the extent true, but subject to considering all these costs also.
Sir, what is the?
And we are also targeting BOT toll project where actually, suppose we have to put some marginal equity also. So that also we have to put from all this money. So what are the cash flow available for next one year? We are turning almost INR 2,400 crores. It is going to utilize on all these, I expect.
In a recent newspaper article, it was also mentioned that most of the HAM projects taken up by many EPC contractors are not in any state of any completion and will be left even halfway. Is that true? That's one, and second is, is it true that in BOT projects, we would be having a maximum of three to four players only who would be competing against us?
Yes, sir. Sir, and is there definitely because you have seen that last almost two years, actually, how the bidding has been there. It is very, very aggressive bidding. So definitely, it has the impact on the definitely quality and the delay in that project. So we know that, actually, because some projects are there put in minus 25, minus 30. We don't know, actually, how it is going really viable as far as we concern. So we are thinking that that might be the reason that's why there is definitely really poor construction quality or delay in the project. So that might be the reason what we are expecting. As far as BOT toll is there, definitely toll project also we are looking on that.
So, if some toll project, as I already said, we are already in talks with Adani and Cube, actually, to do the EPC work for their BOT toll assets. So, we are also working in that area also.
But is the competition limited to only four to five players in BOT?
Because what is happening in BOT toll, because you have to equity contribution is more. So you have to be very good. So right now, limited, actually, three to four players are there who can be able to really put the equity. And if BOT toll project is coming between INR 2,000-2,500 crores of the size, so definitely that much equity contribution, actually, like KNR, actually, we can also individually bid one to two projects, not more than that because that equity is huge, actually. So that's why we are tying up with other investors or other developers, actually, to do their BOT assets.
Sir, what is the chances that we get that MSRDC order which we felt that we could get from Patel Engineering now that the Maharashtra elections are over?
Sir, actually, there is some LOA delays because of the land acquisition. When we have spoken to the authorities, they said it will take a couple of months to clear that and issue LOA.
Okay. So we plan to complete this Karnataka project for which appointed date will be received in the next one week. We plan to just concentrate on that and complete it in the next financial year so that our revenues are not.
Yes, sir. We will continue to focus that completions. Yes. Definitely. All the resources and all everything we will put and try to finish with bonus and all that. We are targeting that, sir.
I appreciate your answering my question so well, sir.
You're welcome. Yeah. Thank you.
Thank you. We have our next question from the line of Ketan Jain from Avendus Spark. Please go ahead.
Thank you. Sir, my question is on so what is the type of NHAI pipeline are you seeing in terms of kilometers and value in EPC, HAM, and BOT separately?
Pardon, sir?
What is the size of orders in NHAI tenders which is currently going to come up in seven? And when we EPC, BOT, how much, sir?
Actually, sir, the size of orders, they started with even today, there are INR 800 crores, INR 700 crore projects are there. But recently, they have started doing those such size projects, and they are just trying to group bigger size projects like 2,000, 3,000 levels they are now, I think, putting on a bid. So definitely, we are waiting for that move, sir, because the smaller contractors, really, they are creating huge havoc in the bids and taking at a very bad price. They are also ruining the quality of the roads, which was noticed by our Shri Narendra Modi ji also. So I think the corrective measures have been started to be taken up. We hope for the better solutions to come up.
I was asking the total value of projects, sir. Total value of projects.
Value of projects as of now, I think we have around, say, INR 55,000 crore, I think, from NHAI.
How much is HAM and EPC?
HAM and EPC, I have not bifurcated, sir. If you want, I would like to go and send it to you.
Okay. But around INR 55,000 crores of projects, right, sir?
Yeah. Actually, it is there, but I don't have it right now. That's the problem.
Understood. Okay. Sir, if you can help us with the adjusted revenue EBITDA path for nine months and 3Q?
Yeah. Yeah. Actually, for Q3 of 2025, the adjusted EBITDA is around 16.57%, amounting to INR 117 crores. And adjusted PAT, actually, for Q3 will be INR 78.35 crores, around 11%. For nine months, adjusted EBITDA is 17. Sorry, sir. 16.4%, amounting to INR 390 crores. And PAT is concerned, it is INR 252.59 crores, amounting to 10.6%.
Understood, sir. Thank you. Sir, my next question is on how is the progress on the Andhra Pradesh capital city project? Are we seeing any tenders for that?
Yes, sir. Actually, they have called on some small-scale projects which are supported by that INR 200 crore-INR 300 crore level projects have been already on the bid. Right now, the city gets sizes smaller and competition is going to be as invisible. So we were awaiting for the bigger scale projects to come down so that INR 200 crore-INR 300 crore level projects have already come up. So now, I think what I mean to say is that the capital growth is now being planned.
Understood.
I heard that CRDA, the Capital Development Authority, is now being formed, and they have been given serious tasks to take up the construction.
Understood. Sir, my last question is on you spoke about orders in Tamil Nadu, Karnataka, and the BOT project with Adani, the Gwalior project with Adani. So if you could help us in the size of these projects, Tamil Nadu and Karnataka, what are the sizes of these projects?
Actually, sir, Tamil Nadu, actually, now we are preparing bid. I think we are preparing a bid about, say, INR 1,900 crore size project for some highway flyover project and around INR 900 crore for highway projects. And I don't know, one more flyover in Coimbatore which is coming up at INR 600 crore, I think. Yes.
Understood. And what about Adani BOT project? What will be that size, EPC?
Sir, Adani BOT, I think 3,400 is the estimated cost. That Agra Gwalior.
Agra Gwalior, correct, and last year on the Karnataka and Telangana, sir?
Karnataka, Telangana. Sir, Karnataka, I think there are two projects only of size around 1,600 crore, and one is about 1,800 crore. The two projects are there in the state government side. And Karnataka, that is Karnataka, sir. And Telangana also, there have been certain bids which have now floating. I think it is the pipeline. It's not yet announced. Around 900 crore, one flyover is coming up, and 900 crore, another flyover is coming up. Those are also areas also we are focusing now.
Understood. I'm sorry, just last thing, sir, you also spoke about Rajasthan irrigation. Any size on those things? What type of projects are there?
Actually, yeah, they have started from 500, but even 5,000 crore project is also there.
500 to 5,000.
Yeah. Quite big also. Yes, sir. 500 crore is only one project, but the rest of all 900 crore and other projects, sir, about, say, 3,000 crore like that. 2,000, 3,000, even 5,000 crore is also there in that.
Understood. Okay. I will get back to you, sir. Thank you.
Yes.
Thank you. A reminder to all participants to please restrict yourself to only two questions. I repeat, please restrict yourself to only two questions. We have our next question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Yeah, sir. Thank you, sir. Are you able to hear me now clearly?
Yes, sir.
Hi, sir.
Yeah. Sir, most of the questions have been answered, just a couple of things. So total size of irrigation in terms of the opportunity in MP and Rajasthan would be how much?
MP not at terms, sir. Actually, we went to the department and we have collected some data that is not yet announced, actually. In pipeline, that means they are sending it for ministry approval and all that. So those are about, say, INR 25,000 crore worth of contracts in different four, five projects in the number. And Rajasthan, as I mentioned, that it is irrigation projects, HAM model they are coming up. They are also varying from INR 500 to INR 5,000 crore it is there. Almost six projects are there.
So total would be INR 25,000-30,000 crore the size?
Yeah. Yeah. Roughly, sir. Roughly. Yes, sir.
Okay. And in terms of the HAM, the equity requirement from us, let's say if we win INR 3,000 crore, how would it be in terms of broadly? For normal road, we have a 40-60, EPC 40. So here, how it would be? And in terms of the equity requirement, let's say if it is a INR 1,000 crore project for simplicity, how much equity will be needing?
Sir, actually, equity concerned, HAM model around 12%-15% could be the equity of the project size. So definitely, I think we are now focusing about, say, INR 5,000- INR 3,000 crore, INR 2,000- INR 5,000 crore projects. So maybe it depends on the project size only, sir. Right now, it is quite difficult to say what will be the requirement. But I think we have well geared up. We have enough cash inflow. Once we get paid from that irrigation department, also we were through with that problem.
For Rajasthan irrigation HAM, I am asking, so there also the 12%-15% kind of equity is needed and not the road, I am asking?
Rajasthan only needed, sir. It is not in MP and all it is coming with EPC model only.
Okay. And in terms of the irrigation, obviously, you have explained, but do we see that any kind of a payment, obviously, INR 60 crore we have received in January, any more likely to come in by March or maybe, let's say, by June?
Yes, sir. We are focusing on likely to come out soon. Yes.
Okay. Okay. Let's say if we get an INR 10,000 crore order inflow, so I'm assuming that the INR 3,400 crore is from Adani toll and maybe Patel MSRDC project there also would be close to INR 2,000-INR 2,500 crore. So both these put together would be close to INR 6,000 crore. So maybe only just INR 4,000 crore we will be needing from other things. So there, let's say if we get it by, let's say, by June and from July to March, how much more then we will be looking at or then we'll stop for some time and then we'll look at. And also in these projects, in terms of the margin level, that at least we will be maintaining 15.5%-16%, 15%-16% margin will be there even if it is a subcontracted.
Sir, actually, now it is all the predictions only, assumptions only. We will try our best, but it is more better to take between 14 and 13, but we will try our best to get delivered because it's all upcoming projects and we do not know what sort of strategies builders are going to adapt and the designs which we are also taking up, so right now, we will take it granted like that, sir.
Okay. And individually, when we are talking that we can also bid the toll projects, so there only we are looking at INR 2,000 crore or less than that projects, only we can bid on a standalone basis?
I didn't get the question, sir.
I'm saying when we are saying that we can also bid the BOT toll projects on standalone basis, there we are looking at only 2,000 or less than that kind of a size. But are the projects there less than INR 2,000 crore BOT toll?
Actually, sir, right now, generally, wherever it's very lucrative, I would like to think about it. As of now, I haven't seen any bid which are a bit of lucrative like Agra Gwalior. Definitely, it is out of my budget, so I'm given a thought for that. But we would like to see some upcoming projects which they are now considering. Mostly, if I get any idea on that the traffic inflows are good and all that, then I'll take my views on it, sir. As of now, I think any bid which I have selected, not such good ones, actually.
Okay. And lastly, the MDO one, so in terms of the size, let's say from the EPC revenue perspective, how much that would be? And do we also need to put in equity if how much equity we would be needing?
Where, sir? Where?
MDO mining project which you have mentioned.
Actually, sir, mining concern, it is main CapEx only that happens. So it depends on the size of the project and depends on the demand what they make in the project, actually. Right now, what we have placed around 200-300 Volvos are required. So we have around 200 Volvos. So we are 100 Volvos we may need to buy that project concept. Recently, we put the Singrauli which I'm talking about.
In terms of the EPC size, how much it will be if we, let's say, if we win this which we have bid, so will it be INR 1,000, INR 2,000 crore or it will be a much bigger project?
That's all, sir. 1,200 only.
Okay. The recent two projects that we have won, that we will be getting or starting the execution by March? The last two projects that we have received INR 430 crore?
EPCs, yes, they can be started. But handover and all, it is going to take time. The financial close of time minimum itself is there. And before agreement, two months is there. So almost eight months' time it will go away. And even the land acquisition, if it is not there again, there will be some issues. A little bit delays, we are expecting around seven to eight months from the HAM model or BOT toll also for that matter.
Got it. Got it. And so broadly, when we say in FY 2025 or let's say FY 2026, INR 3,500-4,000 crore revenue that we will be doing, but if we get the INR 10,000 crore kind of inflow by June for FY 2027, then we should be having INR 4,700 crore plus kind of a revenue that one can look at?
If it's happening really.
Okay. Okay. Thank you and all the best, sir.
Yes, sir.
Thank you. A reminder to all participants to restrict yourself to two questions only. The next question is from the line of Vasudev from Nuvama Wealth. Please go ahead.
Yeah. Thank you for the opportunity. Sir, first question is, if you can give what is the progress on the pipeline and the irrigation projects and also how much revenue have we recognized in these segments in Q3 and how much we expect in Q4 and FY 2026?
In fact, go ahead with this.
Sir, the management line has dropped. I'll reconnect them. Just give me a moment.
Ladies and gentlemen, thank you for patiently waiting. We have the management back with us. Over to you, sir.
Yeah. Hello?
Hello.
Yes, sir. So my question was, our progress on the pipeline and the irrigation projects and revenue that we have recognized in Q3 and we are expecting in Q4 and FY 2026.
So for this quarter, actually, we did revenue of around INR 112 crores, actually. That is around 16%, actually, from irrigation. And for nine months, it is around INR 370 crores. That is around 15.7%. We expect that around same INR 100 crores we will do in the next quarter also because almost all the projects of irrigation is completed. Only this pipeline project that will start contributing in this quarter. And other two irrigation recently what we received in the January, definitely they will start contributing somewhere from the next year due to onwards only.
Okay. Sure, sir. And sir, just a couple of data points. What would be a standalone debt, cash, and the CapEx guidance? Again, what we did in Q3 and how much are we expecting in Q4 and FY 2026?
Yeah. Standalone debt is around INR 27 crores. And standalone cash is around INR 19 crores. Consolidated debt is INR 1,486 crores. And consolidated cash is INR 87 crores.
Okay. Sir, one.
Nine months CapEx is around INR 20 crores, so we expect that definitely based on our existing order book, definitely we need not require the CapEx much, but as we are targeting to receive INR 8,000- INR 10,000 crores of the order book in the next three to four months, so based on receipt of the LOA and based on our mobilization, so definitely we have to rework actually what is the CapEx is going to come in the next year.
Okay. Sure, sir. That's it from my side. Thank you.
Yeah. Thank you.
Thank you. A reminder, please restrict yourself to only two questions. The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead.
Yeah.
Namaskar, sir. And thank you for the opportunity. Hope I'm audible, sir.
Yeah. It's audible. Yeah, sir.
Sir, thank you for a very descriptive analysis of the numbers and the business environment. Sir, but when we investor analysts analyze the current state of affairs for EPC players across the board, there are pain points in terms of receivables. There are pain points in terms of visibility. And even just two, three participants earlier, you were clarifying or giving answer in terms of speaking to the PMO and getting further understanding on how the visibility and the execution cycle will get back to its original proportion. So can you give us investor analysts the thought process as being how these nine months have been for EPC in general for the country? And what are the key bottlenecks currently being faced, whether it is the Jal Jeevan scheme, whether it is, as been told by you, that the visibility is not there?
So just if you could paint the picture, you people are in the business for a very, very long time. So just a few more colors on it would suffice, sir.
Actually, well thank you, Kapoor-bhai. Definitely, if you see what your question is, it is very condensed. What we will say is that definitely, you have seen that almost two years, actually, there are not much awarding is there. And what are the awarding is there that is also very, very aggressive. If you see the EPC projects, they are going on -40% like that. And as far as even HAM is there, that is also going between -25% to -30%. So if we have bidded some of the project, there also we are always in somewhere H2, H3 level only. We could not be able to get that level. So these are really pain points. We really do not understand actually how these things are going. But this is a market, that's why it is just loss of opportunity to play.
If you see that almost last two years, not much award has come to the listed players. So a lot of unlisted players have come in this sector, actually. And NHAI also what did, they downsized the project size. Their project size are between INR 600- INR 700 crores are coming. Not a big project. Due to this, what has happened, that is qualification for a lot of small players are coming and they are quoting aggressively. And this aggressiveness has to complete it with their poor quality and even delay in construction. So due to these reasons, actually, as you know, the last one, the PMO has reviewed that. And again, we are expecting that again, they will increase the order size.
Because what is happened, if we are getting any project of INR 600-INR 700 crores and we are getting project like Kerala to submit INR 2,500 crores, if we are going project to INR 2,500 crores, definitely we can be able to do the good work, actually, and because almost effort will be the same only, so that's why we expect that now NHAI will again, actually, they will accumulate all the small, small projects and make as a big one, so really, it will help to the industry and help to the company like us, so these are the pain points are there in our industry, and we are definitely in a different forum, actually, through our NHBF or whatever discussion we are having with NHAI, we are always telling that.
And as far as BOT toll projects are there, so basically what is happening as we are the EPC company, so toll is most driven to the revenue, toll revenue. So we may not have that expertise in expecting that. Because as far as construction is concerned, definitely, if any engineering is required, we are there. But as when toll revenue is there, that we cannot expect, we cannot predict. If we have to predict toll, actually, so that is not our cup of tea. But even then, we have to bid, actually. So that's why these are the pain points, actually. And always we are telling to our different authorities. So we expect that now all these things will come to the shape. And we will gain again regaining in the industry.
Sir, sorry. Sir, you mentioned about minus 40% and minus 23%. And the numerical number is about the size of the projects that have been awarded. What were you referring to that, sir?
That percent is whatever it is. Suppose INR 700 crores project are there. So minus 40%, it is coming. That is the HAM project. What we have to quote by the you can say the winning bidder will be around minus 35%-40%.
Okay. So then, the projects will not be profitable, and those will not see the light of day going ahead.
Yeah. That's why it is going to the poor construction quality and delay of the project, so that's why it is happening.
Okay. But then they are getting qualified, sir? If they are quoting below, and this will be serious issues for the nation, sir, because these infrastructures are for public.
But sir, as of now, NHAI bidding criteria is L1 only. There is no other criteria other than L1. So they are following that criteria. So until there is some sensible bidding or they will change some bidding criteria, until that, it will be the same.
Okay. And we have highlighted this to the authorities that these are the anomalies or the misproportion done by these players. We have already highlighted these aspects.
Definitely. In different forum, we are already highlighting, actually.
Okay. And last second point is, sir, regarding the issue of the receivable part, sir, are we seeing there is also any limitation of fund crunch from the EPC contractor in terms of releasing the payments or the payment terms are in order as per the order award and the rules?
Sir, as far as NHAI is concerned, definitely. NHAI is good paymaster. So we are not seeing any delay as far as NHAI is concerned. But definitely, receivables from the state government authorities, that is based on their own commitment, based on their fund position of the respective states. So there is real challenge there. But as far as NHAI and MoRTH is there, they are good paymaster.
Okay. And last point on this, sir, INR 10,000 crore order booking, sir, which you mentioned that you are anticipating. So what are we building in terms of this INR 10,000 crore garnering of order? Yeah. I am joining the queue, sir. Actually, it was an extension only since I will not get an opportunity. So please allow me just to complete, please. Thank you, friend.
Okay. I'm disclosing, sir. Again, sir, please.
Sir, what gives us the visibility of this INR 10,000 crore order booking, which we are eyeing within three to four months order book we will create? And again, what kind of margins are we looking to close these orders with? And the execution period, if you could just give some more color to it, sir. And just to add to it also, sir, I joined the queue. 1,400 net debt is on account of the receivable dues longer than the time limit? Also give that. The debtors' days are much higher than what the normal cycle is. How much proportion do you mention that also? That's all from my side. Thank you.
Okay. Sir, as far as order book is concerned, definitely in our call, ED sir explained actually how we are targeting between this INR 8,000- INR 10,000 crores order book. That is definitely from the different sector like Rajasthan irrigation and some project in Madhya Pradesh irrigation and some MSRDC project and some project in Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka. So all this put together, actually, we are targeting something between 8,000-10,000 crores. And one of the projects with this Agra-Gwalior bid also. So if we accumulate, so we are really seeing that there is a visibility that we will get actually between INR 8,000- INR 10,000 crores of order book next to three to four months. So as well as profitability is concerned, definitely, actually, we have to work out actually which sector we are getting.
If it is irrigation, definitely we expect that there will be good margins will be there. So we have to really see in which sectors we are getting this order book. On that basis only, we can comment actually on our profitability. So as far as receivables are there, that INR 1,200 crores receivables are there. Out of that, around INR 577 crores receivables, almost INR 600 crores receivables from the irrigation department, and around INR 590 crores receivables from our HAM project.
So HAM project receivables is based on our fund position in the parent company. We are going to draw actually. Because what is happening is last quarter, we have the sufficient cash. The bulk of the cash has come from the claims. So we utilize that cash actually in this year. So that's why debtors have not been. As far as HAM debtors is concerned, that is a steady growth.
Now we expect that the company requires cash to execute the work in this Q4, so definitely there will be some disbursement in the SPV and we will take the debt actually at SPV level.
Thank you, sir.
Thank you.
Thank you. We have our next question from the line of Bhavin from Anand Rathi Institutional Equities. Please go ahead.
Yeah, sir, so sir, can you just help me with the breakup of the debtors? What are the outside debtors? What are the hand SPV debtors? Can you just help me with that number?
Sir, just now, NH debtors will be around INR 590 crores actually. And irrigation debtors is INR 600 crores.
Okay, sir. Sir, and about that, if you can help me with the revenue breakup. So in this quarter, what is the revenue come from the SPV and, from the EPC project, road projects, and from the irrigation? So can you just help me with that breakup?
Yeah. Actually, HAM contributed almost 60% actually in this quarter. And our irrigation is around 16%. And our road EPC is around 23%.
Okay, sir. Okay, sir. Yeah, sir. Thanks. That's it from my side.
Thank you.
Thank you. We have our next question from the line of Parth Thakkar from JM Financial. Please go ahead.
Hi. Thank you for the opportunity. Sir, I just wanted to ask that there was a sharp decline in the employee expenses. So would this be the run rate going forward, or will it bounce back to previous levels?
Actually, employee, this will actually because what is happening last quarter, actually, there was some variable payment to our management actually, so that's why it was more, but around what are the right now, around INR 40- INR 45 crores, that will be the employee benefit will be the continuing will be there actually.
Okay. Thank you. And are we still targeting to recover INR 600 crores from the Telangana government for the irrigation in this quarter?
Yeah. Definitely, actually. As sir told, that we are rigorously following with the government actually to get this money.
Also last question, sir, what would be our pipeline project revenue for FY 25 and FY 26?
25, 26. Maybe actually we will expect around INR 300- INR 400 crores will be there actually in FY 26 and 27.
Okay. Okay. Thank you, sir. Those were my questions.
Thank you.
Thank you. Ladies and gentlemen, that would be the last question for today. And I now hand the conference over to the management for closing comments. Over to you, sir.
Thank you. So thank you all for joining us on this call today. Please reach out to our investor relations consultant, Strategic Growth Advisors, or us directly. Should you have any further queries, we can now close the call. Thank you.
Thank you very much.
Thank you very much, sir. On behalf of KNR Constructions Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.