Sell KNR Constructions; target of Rs 163: ICICI Securities

ICICI Securities's research report on KNR Constructions

KNR Constructions (KNR) reported a revenue of INR 4.8bn in Q1FY26, down to a five-year trough. The lukewarm execution was primarily rooted in a smaller executable order book (OB). KNR has failed to grab any meaningful orders in the last two years, resulting in the weakened OB. Order inflow (OI) over the last two years has been tepid at ~INR 51bn vs. INR 100bn over FY21–22. As a result, its current executable OB stands weak at INR 48bn (excludes mining project of INR 35bn – to start from FY27). In light of this weakness, we cut our earnings. It has recently received appointed date for 2 HAM projects, which would instil some vim in execution, but KNR meeting its OI guidance of INR 100-120bn remains critical to see any upside. We maintain SELL at a revised TP of INR 163 (earlier INR 178).

Outlook

We cut our FY26E earnings by 28% due to the bleak execution outlook. We maintain SELL with a revised TP of INR 163 (INR 178 earlier).