Operator
Ladies and gentlemen, good day and welcome to KNR Constructions Limited Q3 and 9 months FY26 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. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. K.
K Venkatram Rao, General Manager - Finance and Accounts from KNR Constructions Limited. Thank you, and over to you, sir.
K. Venkatram Rao
Yeah. Good afternoon.
Thank you for joining us today on the call to discuss the financial results for Q3 and 9 months FY26. Along with me, I have Mr.
K. Jalandhar Reddy, our Executive Director, and Strategic Growth Advisors, 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. Over 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 project award during 9 months FY26 remained muted, with the Ministry of Road Transport and Highways and NHAI awarding 1,448 km and 712 km of the project, respectively. Looking ahead, the outlook for project award is improving, with NHAI has already invested invited bid for projects aggregating to ₹1.5 trillion.
Against this backdrop, awarding activity are expected to gather meaningful momentum in the future quarters, supported by the robust order pipeline with a strong bias towards HAM project, followed by BOT and EPC opportunities. Despite the near-term pressure, the outlook for sector remains constructive, supported by renewed policy thrust.
The Union Budget provide a strong impetus to the infrastructure sector, with capital expenditure increased by 9% to ₹12.2 lakh crores for FY26-27, reinforcing the government's continuing 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 aims at strengthening industrial connectivity along the east coast. Complementing these measures, the continue the introduction of the new infrastructure risk guarantee fund, providing partial credit guarantee to the lenders, aim to de-risk infrastructure development during the construction and early operation phase, thereby encouraging greater private sector participation.
At the same time, sector fundamental continue to strengthen. FASTag-based toll collection have maintained healthy momentum, with volume rise by around 17% year-on-year during October to November quarters, and revenue collection increased by approximately 12.7% year-on year-on-year basis.
That this sustained growth enhanced the cash flow of operational road assets and accelerated asset monetization by the ministry, which also create value unlocking opportunities for companies with mature toll portfolio. As a result, asset monetization has emerged a key funding lever for NHAI, enabling to generate resources beyond budgetary allocation.
Monetization proceed of approximately ₹35 to ₹40,000 crores are expected in FY26 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 fundamental remain strong.
With improving awarding momentum, supportive budgetary allocation, and robust policy framework, and growing monetization avenue, 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 31st, 2025 for HAM project is as follows: Ramanattukara to Valanchery around 99.4%, Valanchery to Kappirikkad 98.3%, Chittoor to Thatchur around 97.4%, Magadi to Somwarpeth around 90.1%, Marripadu to Somvarappadu approximately 64.9%, and Mysore to Kushalnagar Package 5 10%, and Mysore to Kushalnagar Package 4 approximately 6%. As of December 31st, 2025, the company has already invested ₹727 crores of out out of ₹962 crores equity infusion required for the all the HAM project.
The additional equity requirement of ₹235 crores to be infused as ₹87 in FY26 and around ₹148 in FY27. For this, you can refer to slide number 23 of our in investor presentation.
On 24th December 2025, the company executed share purchase agreement with IndInfravit Trust for the proposed sale of its 100% shareholding, along with a subordinated debt, in the following special purpose vehicles: KNR Palani Infrastructure Private Limited, KNR Ramagiri, KNR Guruvayoor, and KNR Ramanattukara. As part of this transaction, the company will invest around ₹566.8 crores in four SPV in the form of equity and sub debt, against which company is expected to receive total proceeds of ₹1,543 crores, which includes ₹1,398 towards sale consideration and around ₹145 crores towards the estimated cash surplus, which will be streamed up to the company in agreed manner.
In November '25, the company received the completion certificate for Avinashi road project in the Tamil Nadu as of 8th October 2025. The company also received a letter of acceptance from the Musi Riverfront Development Corporation Limited for the construction of a an iconic bridge across Mir Alam Tank connecting Bengaluru National Highway at Shastripuram to Chintalmet under the EPC mode.
The project has a contract value of ₹319 crores in construction period of 24 months. Lastly, the CRISIL reviewed the company's long-term bank rating facilities and reaffirmed them as a CRISIL AA with stable outlook, while removing the ratings from the Rating Watch with Developing Implications.
The short-term rating was also reaffirmed as CRISIL A1+ and also removed from Rating Watch with Developing Implications. Now coming to the order book position.
As of December 31st, 2025, the company's total order book include the recently won EPC project stand at ₹8,849 crores. This is divided into 29% for the roads project, 19% for irrigation project, 20 12% for pipeline project, and 40% for mining project.
Client-wise bifurcation is 84% order book is from the third party, and balance 16 is from captive HAM project. The third order book percentage is split between state government around 80%, and central government 2%, and 2% from the other private player.
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 quarters.
We are hereby aiming at order inflow of approximately ₹10 to ₹12,000 crores by end of September 2026, with mix of projects like NHAI, irrigation, and other state government project. Now let me to the Q3 and 9 months FY26 standalone financial performance.
The revenue for the quarter stood at ₹585 crores, and EBITDA for Q3 FY26 stood at ₹30 crores, and EBITDA margin is 5.2%. Net profit for the quarter was ₹18 crores.
On 9 months FY26 highlights, revenue for 9 months FY26 stood at ₹1,561 crores, EBITDA stood at ₹150 crores and margin at 9.6%. Net profit for 9 months FY26 stood at ₹98 crores.
Now coming to Q3 9 months FY26 consolidated performance. The revenue for the quarter stood at ₹743 crores, and EBITDA for Q3 FY26 stood at ₹160 crores, EBITDA margin is 22.4%, and net profit for the quarter was ₹104 crores.
Moving on 9 months FY26 highlights, the revenue for 9 months FY26 stood at ₹2,002 crores, EBITDA for 9 months FY26 stood at ₹542 crores, with EBITDA margin of around 27.1%. Net profit for 9 months FY26 stood at ₹332 crores.
Now moving on the standalone balance sheet. The company continued to remain strong balance sheet.
The working capital debt stood at ₹82 crores, compared to ₹93 crores as of March 2025. The consolidated debt as of 31st March 2025 is stood at ₹2,443 crores as compared to ₹1,847 crores as of 31st March 2025.
The net debt to equity on consolidated basis 31st March 2025 stand at 0.5 times as compared to 0.41 times as of 31st March 2024. With this, we can open the floor for question and answer.
Operator
Thank you very much. We'll now begin the question-and-answer session.
Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove 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.
Our first question comes from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Hi, sir. Thank you.
Sir, 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 parts. First, in the balance fourth quarter, how much execution or the revenue we are looking at out of this 8,850-odd crore order book?
Out of this, in FY27, how much revenue are we looking at? That is first.
Then, on the order inflow, I will come.
K. Jalandhar Reddy
Yes, sir. Actually, order backlog concerned, what we have very little.
In fact, certain portion is from mining. Mining activity to start with, I think if we are able to start that in coming second quarter of next coming financial year, or third quarter, practically, it is possible to make it in third quarter, as the the the forest clearance and that Banhardi village Gram Sabha could not be concluded.
This is going to further take another 8 to 10 months' time, sir, to start with. This is the situation.
What we are left with is only that around 4,000-plus which is need to be executed, and that need to be executed within upcoming say 2 years' time whatever we have. The the the projects in that Bangalore-Bijapur highway is that that package 32 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 2,000 crore could be executed this year, this financial year, I mean to say.
For that sir, 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 are we have already taken one CFO for high-speed rail and railways.
That is being now taken care. We are concurrently looking for bids in that also.
Again, we are also participating in state highway tenders for what you call power projects also we are trying to participate, as well we are also participating in that sewage treatment also we are participating. Apart from that, irrigation is so highly 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 would be participating in those tenders.
Definitely, sir, 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 hour. We all understand the importance of that thing, and yeah, we we even mind our investors' concerns about this, sir.
Shravan Shah
Yeah. Sir, further just trying to understand.
Let's say break it part. Till now, how much orders that we have bidded, and 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, though I understand Venkat sir has said that we are looking at 10, 12,000 crore by September. Just trying to break it part.
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 FY27, how much can be converted out of this into the revenue in FY27?
K. Jalandhar Reddy
Sir, actually, you have asked about the mainly how many bids we have placed right now. First, I would answer this.
Odisha we have participated in some HAM projects. I think it's tendered on 3 days ago.
Apart from that, we have also participated in 7 tenders in I think Karnataka. Karnataka is a very small bid, but okay, ₹400-₹500 crore range, and apart from that, we are now I think nothing now other than that.
Maharashtra bid is also there. We have placed in Maharashtra.
They are smaller, ₹600-₹700 crore projects, little bit. Almost about say ₹7,000 to ₹8,000 crores we have quoted as of now, sir, 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 it is a court case and all that. Court directions are needed for that.
Apart from that, sir, we have nothing now. We will be placing bids in mining.
There is a Jharkhand only there is ₹5,000 crore project is there, which we are now trying to participate in that bid. Apart from that, there's about 63 projects are there before March.
I can see the list also scaling from 3,000 to say 3,000 to 500 also there. Different project sizes are there.
Even ₹4,000 crores is also there, and a lot of works like that, sir. There are bigger-sized projects also.
Looking forward, I think even if you are able to succeed in getting three bids, two bids out of NHAI, also we'll be having enough order in hand, sir. As we all know, the time to take any projects to come in, it depend on again, depending on the land situation in the project thing.
Minimum time from bid stage to the financial closure stage is also, as 7 to 8 months it is roughly prescribed that's a mandatory time that can be before financial closure. These are all the hurdles which we have, sir, in this.
Apart from that, there are railways also 26 bids are there, which we are trying to participate. Metro, only one bid is there, that also will be participating, sir.
Solar projects which we are trying, sir, I think the bids are to come from Karnataka as well from Maharashtra also, which we made initial level enquiry from the department. There are bids going to come up in March.
The bids may happen in April or May, April, I think. This is the situation, sir.
Irrigation, there are 11 bids which we are targeting, sir, are there.
Shravan Shah
Sir, 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?
K. Venkatram Rao
Railways 26 bids, I'll give you [unclear] I have done that.
Shravan Shah
No issues, sir. Broadly, in terms of ₹7,000 to ₹8,000 crore bid which we have already placed where outcome is yet to come, and if I just summarize, maybe a ₹30,000-₹40,000 crore kind of a bid we are planning to put in now, and out of that, we are looking at 10 to 12,000-odd crore.
Given that let's say we do another ₹500 crore kind of a execution now, for FY27 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 FY28? 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 we have missed on the revenue front, that we should be covering in FY28.
There how one can look at? Can we look at 4,500 crore kind of a revenue in FY28?
Is it possible?
K. Venkatram Rao
Sir, Shravan, most probably it could be possible. You go.
If further get right now order book is ₹8,850. On that, actually, mining order is around ₹3,500.
If we exclude them, then order book will come to around ₹5,300. On that, irrigation is almost 1,700 out there.
Out of that, almost 800 is that is only unbilled is there. If you remove that 800 only, a new irrigation only, we left out of around ₹4,300 crores of order book, existing order book.
Out of 4,300, we can execute around you can say 2,000 actually work in next year, 2027, out of the current order book. If any order is coming and we can able to execute, that will be added extra.
With current order book, definitely we can able to execute around ₹2,000 crores in 2000 FY27.
Shravan Shah
Okay. Lastly, margin, though this quarter if you can highlight specific reason why it has significantly fallen, and going forward, once we get this order inflow, can we look at again 13%, 14% kind of a EBITDA margin?
K. Jalandhar Reddy
Sir, actually to regularize that, I think we hope not exactly this year or FY27 also we are not expecting that way, sir. I think 2028 should be very bright year for us.
That's what I'm thinking, 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's a difficult to say. The competitive intensity is also very very tough here, sir, nowadays.
With all that, I think adding to our perception, definitely I think it should go little bit lower side on this 2027. Maybe it's quite difficult to expect levels like 13%, 14% levels right now.
I think we can expect something near to 9, 10 figures could be deliverable. Because the entire project cost is project site, people, everything our manpower is completely on, and when our turnover is coming down, definitely there is an impact on that extra manpower.
Sitting idly, and second, equipment is very huge with us, and that is not performing to the required levels. This is also causing such this thing.
Shravan, with that actually what sir said, because lot of project is coming to final stage. If you see our Guruvayoor project, our Ramanattukara project, our Nagari project, and Avinashi project, all these projects were almost fag end of the end.
What is the happening? At fag end, there won't be much revenue, but corresponding expenditure will be there, what sir is talking.
Fixed expenditure is already there. That's why, actually, this quarter actually this has come down, and as you know that in one of the project actually due to this construction of viaduct, around ₹20 crores actually extra additional cost has come in this quarter.
These are the mainly reason, actually, why our EBITDA has come down from 5% in spite of our industry level. In future actually, next year also will be the maybe 9%, 10%, but 2028 onwards actually, once we get all the project, then definitely we should try to get our sustainable EBITDA of around 30%.
Shravan Shah
Okay. Got it, sir.
Thank you, and all the best.
K. Venkatram Rao
Thank you.
Operator
Thank you. Our next question comes from the line of Niteen S.
Dharmawat from Aurum Capital. Please go ahead.
Niteen S. Dharmawat
Thank you for the opportunity. Am I audible?
Operator
Sir, your voice is breaking.
Niteen S. Dharmawat
Hello. Am I audible?
K. Jalandhar Reddy
Yes.
Operator
Yes.
K. Venkatram Rao
Now it is okay, yeah.
Niteen S. Dharmawat
Please go ahead. Okay.
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?
K. Venkatram Rao
Yes, sir. Up to March end, we could see almost 63 number bids from NHAI we have collected.
I think it's all selected only I'm talking about, in which the size of the projects are varying from different sizes, almost five ₹5,000 to ₹6,000 crore sizes to it is varying up to 400 also. These are the project sizes we have, sir.
Most of them are above 1,000. Very few are below 500 also.
We have selected in a pattern where it could be our interest, or the nearby projects, or side-by-side projects, all that smaller scales also we are grouping and trying to bid so that it becomes a bigger portfolio for us. Like that, we are targeting, sir.
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% to 3% of the margins and then go ahead. That is to be also noted, sir, for few projects, not all.
Maybe for state highway and all, we are very good we can get a little bit EBITDA more. NHAI is concerned, only to make ourselves right now comfortable, we would be bidding little bit few projects little bit lesser, because the initial level aggression will be there.
There we will be. The size of the projects are grouped more than ₹3,000 crores projects, there we can aim the right margins as we used to get earlier.
Definitely, sir, hitting on bigger-sized projects will always be helpful. That's what I'm thinking right now.
Niteen S. Dharmawat
I got it, sir, because last few projects that we lost with really small numbers, if I understand it correctly. Maybe some bit of aggression from our side would help.
Is that something that we are concluding?
K. Jalandhar Reddy
Yes, sir. That's what I'm also looking at, sir, right now.
Yes.
Niteen S. Dharmawat
Sorry, sir. What you said?
K. Jalandhar Reddy
Yeah. Actually, some sort of healthy bidding only we have to do, sir.
However, we'll have to little bit dilute on the margin side so that to keep ourselves first comfortable and then make bids. As a combination, it could be good one.
That's what the conceptual thing which we are trying to design right now.
Niteen S. Dharmawat
Correct, sir. Correct.
My second question is about the net debt. With all the deals that we have done recently, what will the consolidated debt after we receive all the money?
Can you highlight that and how it is going to look from the balance sheet perspective when we are bidding for the new projects?
K. Venkatram Rao
This overall, actually, our debt consolidated as of December is there around ₹2,400 crores. Out of 400 2,400, what are the four SPV that we are doing the monetization, their debt is around ₹2,100.
As of that, consolidated as of December will be around ₹300 crores, actually. In future also, the debt of this basically one this we have this three HAM project is going on, actually.
On 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 ₹500 crore crores on consolidation basis.
Niteen S. Dharmawat
Got it, sir. Thank you so much and wishing you best, sir.
K. Venkatram Rao
Thank you. Thank you.
Operator
Thank you. Our next question is from the line of Vaibhav Shah from JM Financial.
Please go ahead.
Vaibhav Shah
Sir, you indicated that we would be closing at ₹2,000 crores revenue in FY26. It indicates a revenue of only ₹450 crores for Q4.
There will be a sharp fall in a Q-o-Q business in Q4?
K. Venkatram Rao
Because we have whatever the existing order book is there, based on that only we are projecting that we will get around 450 to. Total this year, we are going to achieve around ₹2,000 crores of the turnover.
Vaibhav Shah
Next year also 2,000?
K. Venkatram Rao
No, next year is based on our existing order book. We will go to 2,000.
If we are getting some good project, actually, in the maybe in first quarter or maybe in Q2 also, then we can try to expedite and we can, if it is EPC work is coming, definitely we can look into. If it is HAM project, then it's almost will take further 9 8 to 9 months to complete.
That's why if additional order is coming, definitely that will further add it in our revenue.
Vaibhav Shah
Worst-case number is 2,000 for next year?
K. Venkatram Rao
Based on our existing order book.
Vaibhav Shah
Okay. Sir, secondly, our order inflow in YTD would be somewhere around 4,300?
K. Venkatram Rao
This year will be In 9 months,
Vaibhav Shah
the mining order and two EPC projects.
K. Venkatram Rao
Mining definitely will be around,
Vaibhav Shah
yeah,
K. Venkatram Rao
it will be around ₹4,000 crores.
Vaibhav Shah
Around 4,000. There were two orders, right?
One was multi-level flyover at Khajaguda, and other was iconic bridge across Mir Alam Tank. That put together itself is around ₹800 crores.
K. Venkatram Rao
450 actually is put together. So 400 Yeah, it's 800.
₹800, correct, 800, correct.
Vaibhav Shah
Mining is around 3.5. It will be around 43, ₹4,400 crore order inflow.
K. Venkatram Rao
4,300, in this year, yeah, correct,
Vaibhav Shah
correct. Sir, and according to media articles, we're also one project called Thiruvanmiyur to Uthandi HAM project from the, I think, from state government.
Any update on that? We were L1 in that HAM project.
K. Jalandhar Reddy
Chennai. Chennai, sir.
Chennai project, sir, actually, there is a court case. That court case the hearing is on 12th of this month.
Earlier to this, it's very difficult to say anything, sir. However, actually, the department is also under discussion with that committee.
There is a committee. They're discussing on how to go about that court case after that.
I think The
Vaibhav Shah
court case is regarding?
K. Jalandhar Reddy
Actually, sir, that one of the bidder he disqualified. He has no qualification, actually.
He's fighting in the court to qualify,
Vaibhav Shah
as
K. Jalandhar Reddy
he is less by so much amount, like that he is.
Vaibhav Shah
There
K. Venkatram Rao
he went to the court. One single bench has cleared in the department favor, because it is we are no way concerned with it, actually.
Generally he made an allegation on that court that you have been blacklisted, how you can bid, like that. He made an allegation for which we have submitted our documentation, because we went to the court, and we got nullified that order.
After that, NHAI considered with a settlement agreement saying that we will do the flyover at free of cost and there is not put us in the blacklist. There's no blacklist for us, which we have explained to the court, and that part we got cleared from the single bench.
Now he went to the double bench, actually. Now double bench hearing is on 12th, sir.
Once that outcome comes, then we can be able to tell you what happened, sir.
Vaibhav Shah
Okay. Okay.
Sir, secondly, any update on Bhandara-Gadchiroli order? So Bhandara-Gadchiroli
K. Jalandhar Reddy
this is particularly long wait. We've been extending the bank guarantees and waiting for that, because the land acquisition only concerned what they're talking about.
I think in a month's time, we'll be able to know that, sir. They also said we will somehow clear it in March somewhere.
Vaibhav Shah
Any possibility of getting LOA sometime in first quarter next year?
K. Jalandhar Reddy
Yes, sir.
Vaibhav Shah
Or is there a possibility of cancellation of order?
K. Jalandhar Reddy
Both the possibilities are there. We really know do not know.
It's it's pending with CMO office, actually, the CMO. CMO
Vaibhav Shah
is
K. Jalandhar Reddy
what CM takes a view based on it, actually. After lagging on to the project for so many years so many days, generally it'll not go in cancellation, because if they have to cancel, they would have canceled by now.
Because they have canceled that multi-modal corridor and they're recalling the tenders in BOT toll. This is not canceled as of now.
Vaibhav Shah
Okay. Sir, lastly, one bookkeeping question.
Out of your irrigation book of ₹1,700 crores as of December, what would be the unbilled portion?
K. Venkatram Rao
Around ₹800 crores, ₹816 crores unbilled.
Vaibhav Shah
The revenue potential is only 900-odd crores from the irrigation book incrementally? Yeah,
K. Venkatram Rao
900, yeah, yeah.
Vaibhav Shah
What would be the total unbilled revenue at the company level?
K. Venkatram Rao
It is around 1,300, ₹1,355.
Vaibhav Shah
In the water pipeline order, we have seen that the order book is roughly ₹1,033 crores. Also there is some unbilled portion over there in that order?
K. Venkatram Rao
This pipeline work, no?
Vaibhav Shah
Pipeline.
K. Venkatram Rao
Ha, there is a unbilled is there around 100 around ₹140 crores unbilled is there, actually, on that.
Vaibhav Shah
That also should be reduced as if we want to look at the revenue potential?
K. Venkatram Rao
It will also reduce, yeah, correct.
Vaibhav Shah
Okay. Okay.
Thank you, sir. Those were my questions.
K. Venkatram Rao
Yeah. Thank you.
Thanks.
Ritesh Poladia
Thanks for the opportunity. Sir, if you can give us some comments on Kaleshwaram Package 3 and Package 4, how much needs to be done more?
K. Venkatram Rao
It's a total this outstanding receivables on this in Package 3 and Package 4, Package 3 there is no outstanding receivable. Whatever the certified bills were there, it is already paid off.
With respect of Package 4, around ₹677 crores is the certified bills that is pending for payment. Other than this, unbilled is in both the project is around ₹650 crores.
Total around ₹1,430 crores is the amount, actually, we are supposed to receive from the government of Telangana for certified and unbilled portion.
Ritesh Poladia
Do we need to spend more on this project, or is this over from our end?
K. Venkatram Rao
It's for Package 3 is definitely no issue because we are receiving collection. As far as Package 4 is concerned, that left-out order book is around ₹100 crores is only there, actually, in Package 4 only.
For that, actually, we may have to incur some expense, otherwise, most of the work of Package 4 is also completed.
Ritesh Poladia
Okay. Sir, is there any legal actions we are taking, or we are still waiting for government to come back to us?
K. Venkatram Rao
No, definitely we are following with the government, and 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. That's why it is taking some time.
Any timelines
Ritesh Poladia
you can give us by what time this can be cleared out, or is there any chance that we need to write it off?
K. Jalandhar Reddy
No, no, definitely government side there is a delay. There is no question of write-off.
Because definitely Writing off means, write-off is basically, it will be considered. See, the thing is they can't pay, sir.
Government is not saying that they will not pay money. They are really certifying the bills and they want us to do the project and all that.
They say this month, that month, they're extending. The thing is, sir, hopefully, I am also thinking partial payments can be recognized in this month, March ended.
By March ended, partial payments should come out. That's what we are also thinking, because there is a necessity of that project to be commenced.
Recently in CMO assembly also there was discussion. After that, there is CMO office, there is a discussion with all the concerned officers were called there, and they wanted water for Hyderabad.
The Hyderabad badly needs water, for that, it's going to be a critical thing for them. Unless they commence this project, upcoming year they cannot give water properly.
To address this, they wanted this project to be speeded up. They said the department has said that it is being not paid for so many years and contractor is slowly moving on it, and there is no significant progress in a expected progress is not there.
That's what they said. Then CM said, "No, we'll pay them.
Ask them to speed it up," like that they said. The department approach us, and they said, "Okay, you pay us.
We'll speed up." That's what we said.
It's come to this, sir. I think, hopefully, the heat is coming up from the requirement side.
Definitely, they should consider to pay us.
Ritesh Poladia
Okay. Sir, another question on high-speed rail side, what kind of projects you will be targeting?
K. Jalandhar Reddy
Sir, actually, it's a very premature stage, because I think already the high-speed rail network is being done in India. Right now, in 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 is a retired person, Mr.
Ashok, has been taken on the board now. He is forming the team, and also he is likely to visit the concerned 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 also want our footprint over there, so that, now that roads we had a bad hit this two years onwards.
Definitely we want to have another portfolio where it can keep us in a growth track. That's what our conceptually we are thinking.
Because it's a civil construction, we are all there, the civil construction. Only the rail mechanism and all that we need to little bit learn with design consultant and all that.
There are lot more people are available with it. Definitely we can cope up and do work.
That's what our gut feeling. That's why we are starting up, sir.
It's a very very starting stage with us. That's all from my side.
Thank you, and all the best, sir. Thanks.
Operator
Thank you. Our next question comes from the line of Deepashri Joshi from Ambit Capital.
Please go ahead. Miss Joshi, your line has been Yeah, please go ahead.
K. Venkatram Rao
It is not audible. Her voice, no, I think it's
Deepashri Joshi
Am I audible now?
Operator
Yes,
K. Venkatram Rao
ma'am. If you could be a
Operator
little louder.
Deepashri Joshi
Hello.
Operator
This is better. Please go ahead.
Deepashri Joshi
For the canal projects, is there a change in scope for the bid cost?
K. Venkatram Rao
Which project, excuse me?
Deepashri Joshi
The canal projects. Paleru link canal and Sitarama lift irrigation.
K. Venkatram Rao
That you are new one. Last time it is ₹327 crores.
It is the same only, our order book is the same only, with ₹327 crores only.
Deepashri Joshi
My question is because the total irrigation project in September '25, in the order book, the number was around 15 ₹1,500 crores. Now the number has increased to ₹1,700 crores.
Just wondering where the increase has come from. That
K. Venkatram Rao
it is that addition in our Package 4, actually. Whatever 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 this project.
It is due to our existing Package 4.
Deepashri Joshi
Okay. Whatever addition is because of Package 4.
K. Venkatram Rao
Basically, yeah.
Deepashri Joshi
Okay. When is the Paleru canal and other Sitarama lift when is that expected to start?
K. Venkatram Rao
Actually, because there is some land acquisition issues are there in that project. This now government is sorting out that.
It may start in somewhere in next year, Q1 of next year.
Deepashri Joshi
Got it. Just one more thing.
What is the CapEx guidance for '26 and '27?
K. Venkatram Rao
We definitely with because whatever the existing CapEx are there, that is actually sufficient for our order. Whenever if we are adding some new project, actually, in sector, for that CapEx may required.
Really that we have to see that when we are getting this project. Based on that, we may go up to around you can say ₹200 crores CapEx in next year.
Deepashri Joshi
Okay. Got it.
Sorry, last question. For the Package 4 and 5, Mysore packages, what is the expected execution or the revenue that you're expecting in Q4?
K. Venkatram Rao
For which project?
Deepashri Joshi
Package Package 5 Package 4, Package 5, Mysore-Kushalnagar. Achha
K. Jalandhar Reddy
achha. For this two project in this quarter you're talking, in Q4 or next?
Actually, ma'am, that yes, this is concerned, there have been almost the new land problems have cropped up there. Because it's a complete greenfield land which is cutting down entire villages' access to the other part of the street.
They wanted some service roads, for which state government supposed to do the land acquisition, which NHAI supposed to construct it. The thing is now, because of this issues, sorry, because the main problem is the public, they have already not started any land acquisition as of now by the Karnataka government.
There public got angry, and they stopped in certain areas. Package 2 15 Package Package 4 Mysore 4, yes.
Package 4 concerned, 5 concerned, there is land problems. 4 concerned, I think only 60%, 65% land is available.
Package 5, the land is almost say only 50%, 55% available, that's it. Within that only we have to finish.
That's what what we are planning is that we do a little bit early completion is ensured, leaving the gaps of this land shoots. Balance, we'll be going for this completion.
I think the issue is taken into PMO purview to pursue that matter, as NHAI failed to convince the people. This is under PMO's purview, sir purview, maybe this gets solved in another four, to five months, what they are saying, 2, 3 months, actually.
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 thing, we are doing the part.
Deepashri Joshi
For Package 4, you'll still be able to maybe finish because there are no issues as such, but Package 5 is still a concern.
K. Jalandhar Reddy
Yes, ma'am. It's a concern, but the whatever the balance leftover land, whatever the land for working is available, that will finish and go for PCOD.
As such contractors have a number of gaps which they doesn't give you before 6 months, that can be deleted for leaving for PCOD, and then, again, after that, we will be doing for PCOD 2 of final completion.
Deepashri Joshi
Both combined, what do you think will be the revenue from these two projects in Q4?
K. Venkatram Rao
Actually, these two projects are about say whose EPC is around ₹10,000 ₹1,000 and-odd, ₹1,000. Roughly we get around say ₹300-₹350 crores.
They're already partially executed now, almost ₹1,100 ₹1,100 is pending. Which will come around 400, ₹450 crores in next.
Deepashri Joshi
In next year, FY27, out of that, we can expect around 40%, 50%, around ₹450-₹500 crores, actually. Okay.
Got it. Got it.
Thank you so much, sir.
Operator
Thank you. Our next question comes from the line of Bhavin Modi from Anand Rathi.
Please go ahead.
Bhavin Modi
Hi, sir. Thank you for giving the opportunity.
Sir, just wanted to understand there was a hike in the subcontract expense. It's around ₹216 crores and that has led to the decrease in the EBITDA margin to 5%.
Can you just help me what is this cost pertaining to?
K. Venkatram Rao
Sir, actually, as our pipeline project is there, that is we have given back-to-back to our subcontractor. On this project, actually around ₹120 crores actually turnover is happened, actually, out of ₹216 crores, 170 crores is pertaining to these subcontractor things are there.
That's why subcontract expenses has increased. As subcontractor project has actually, compared to, less margin.
That is also one of the reason that our total EBITDA has reduced. Other reason, as I already told you, due to completion of our projects in the final stage and one issue in viaduct construction in Ramanattukara, these things has actually factors and reduced the EBITDA.
Bhavin Modi
Okay. Sir, there was a accident, right, on NH-66 for which we had to do some of the rework, right, worth ₹20-₹25 crores?
What is the status with respect to that? We did some settlement with NHAI.
Viaduct.
K. Venkatram Rao
Yes, sir. The viaduct construction is going on, sir.
I think almost substructure is 100% completed. Superstructure is going to complete by this month end maximum.
Plus or minus 10 days, that's it.
Bhavin Modi
Sir, how much money did we spend?
K. Venkatram Rao
We spent around ₹30 crores actually as of now, around 40 to 15 15-20 crores you have to do in 15-20 crores.
Bhavin Modi
We have incurred around
K. Venkatram Rao
₹50 crores on that project.
Bhavin Modi
Okay. Got it.
Sir. That's it from my side.
K. Venkatram Rao
Okay. Thank you, thanks.
Operator
Thank you. Our next question comes from the line of Vasudev from Nuvama.
Please go ahead.
Vasudev Ganatra
Yeah. Thank you for the opportunity.
Sir, I just wanted to know how is the progress going on the irrigation and the pipeline projects, how much have we executed in 9 months, the spending order book, and when do we expect to complete these projects?
K. Venkatram Rao
Actually, out of this 1,033, actually, we already around ₹150 crores work already done in the month of December. In this quarter, actually, Q4, we are expecting around ₹200 crores work in this quarter.
Already ₹100 crores billing is there, actually, that we have to put the bill, and balance ₹100 crores in the next month. Definitely out of 11 if you say ₹1,100 crores, almost 450 around ₹350 crores, actually, is going to be executed by this year-end.
Maybe in next year, we may execute around 300 to ₹400 crores, balance maybe around ₹400 crores worth in pipeline project for the next year.
Vasudev Ganatra
Okay. Sir, just a clarification on the subcontracting expenses.
You said 170 crore was for irrigation projects where we haven't received the amounts. Revenue has been booked, but cost has been incurred.
That's why margins are low. Is my understanding correct?
K. Venkatram Rao
No, no, corresponding because our accounting is based on expenditure basis. Already, I have considered in our cost as well as in our revenue to that extent the margin, whatever our EBITDA margins are there we had to.
In revenue also consider, expenditure also consider. Because being the subcontract expenditure, we won't get that 13%, 14% EBITDA in that.
Generally, subcontract back-to-back contractor will have around 3% to 4% margin. That margin only has been build up in the financials.
Vasudev Ganatra
Sure, sir. Just a few bookkeeping questions.
If you can help me with the standalone debt and cash levels, the segmental revenue split, and CapEx that we did in the third quarter.
K. Venkatram Rao
Standalone debt is zero, actually, and there is a cash surplus as of December of ₹80 crores in their standalone basis. Any
Vasudev Ganatra
The CapEx in Q3 and the segmental revenue split.
K. Venkatram Rao
We have only one segment, actually. We have only one segment.
Whatever the revenue is there, that is only from one segment. As far as CapEx is concerned, we added just actually ₹5 crores of the CapEx, actually, in this year add.
Vasudev Ganatra
Sir. I was meaning of the total revenue, how much is from the road HAM projects, EPC, irrigation, if you can give that split for the third quarter.
K. Venkatram Rao
Achha, okay, okay, that percentage is there in HAM, it is 27%, 28%. Irrigation is around 17%, and back-to-back is around 33%.
Our own execution is around 22%.
Vasudev Ganatra
Okay. Sure, sir.
That's it from my side.
K. Venkatram Rao
Thank you, thanks.
Operator
Thank you. Our next question is from the line of Dheeraj Kruplani from Avendus Park.
Please go ahead.
Dheeraj Kruplani
Hello. Am I audible?
K. Venkatram Rao
Very much
Dheeraj Kruplani
audible,
Operator
yeah. You're audible.
Dheeraj Kruplani
Yeah. My question is follow-up on one of the previous questions.
Like we said, YTD FY26, we have secured ₹4,300 crores of orders. Like 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 FY26 FY27 order inflows?
K. Jalandhar Reddy
Definitely, actually, because this quarter actually we are expecting more of the bid from NHAI. Definitely we are targeting to add, actually, some of the order in Q4 like Odisha HAM project we have bidded actually ₹5,000 crores.
Definitely it is an target, actually, we want to add something. Total around ₹10 to ₹12,000 crores we are targeting by September 2026 actually.
We should able to get actually further order inflow of around ₹10 to ₹12,000 crores by September 2026. These are the target, and towards that already sir told that almost 7 to ₹8,000 crores we already bid, and we already identified ₹30 to ₹40,000 crores actually order that we are going to bid.
That's why we are working on that, and hope
Dheeraj Kruplani
Okay. Sir.
Thanks. Thank you.
K. Venkatram Rao
Thank you.
Operator
Our next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Hi. Sir, just a clarification.
The further equity that to be invested, you said ₹235 crore, but given the lower equity for the four that we are selling, it should be a ₹107 crore that we should be putting additionally? Yes.
K. Venkatram Rao
That's why revised equity is out of 962 we already put 7, but leftover is only ₹235 crores of the equity in our future HAM project.
Shravan Shah
I will have a word with you on that. This entire ₹1,543 crore, how much out of that we are likely to receive as a cash by March?
K. Venkatram Rao
Actually for two project, that is Palani and this Ramagiri actually, that we are planning to complete because we already had applied to the NHAI for NOC and to the NHAI also. We are targeting to close Palani and Ramagiri, that put together is coming to around ₹500 crores, actually, by this March end, and balance with Ramanattukara and Guruvayoor in first quarter of the next year.
That is our target, actually, to complete that.
Shravan Shah
Okay. Okay.
The CapEx for this mining that we've got, when we will be doing the CapEx for that?
K. Venkatram Rao
Definitely this, as you told us, that this still forest clearance has not come. Based on that, maybe in next year, end of the year, maybe we have to do some CapEx in mining, when we see that there is a physical front is available to execute our, accordingly we will make up the required CapEx.
We expect that somewhere in Q4 of the next year we may able to take some CapEx in that project.
Shravan Shah
Total CapEx on that project is ₹350-odd crore, if I'm not wrong?
K. Venkatram Rao
Yeah. Tentatively, yeah, ₹350 crores, yeah.
Shravan Shah
Some we will do in 4Q FY27, and the balance will be in FY28? Correct,
K. Venkatram Rao
yeah.
Shravan Shah
Okay. Okay.
Got it, sir. Thank you.
Operator
Thank you. Our next question is from the line of Vaibhav Shah from JM Financial.
Please go ahead.
Vaibhav Shah
Sir, you indicated that in the Kerala project, the cost which we have to bear of viaduct construction, it would be roughly 14, ₹15-odd crore in Q4 as well?
K. Venkatram Rao
Definitely. For Q4 is left out around ₹15 crores, so that we have to execute it, yeah.
Vaibhav Shah
That will come in Q4?
K. Venkatram Rao
That will come in Q4.
Vaibhav Shah
Okay. Secondly, for the pipeline order, what revenue are we targeting for FY27?
FY27,
K. Venkatram Rao
we are targeting around ₹400 crores, ₹400 to ₹450 crore on that project. Balance will be in FY28?
Balance will be in FY28.
Vaibhav Shah
Okay. Sir, for the two new orders which we got, the two EPC projects, 450 and 300, what is the timeline for those two orders?
One was 24 months, the Mir Alam bridge. What about the second order?
K. Venkatram Rao
Both are also 24 months only.
Vaibhav Shah
That should be completed by FY28, both of them?
K. Venkatram Rao
Both are to complete FY28, yeah.
Vaibhav Shah
When do we expect to start the execution on them?
K. Jalandhar Reddy
Mir Alam, sir? Mir Alam is started.
Work is started.
Vaibhav Shah
Just
K. Jalandhar Reddy
mobilization is going on, everything piling work is also started. Actually there is a change in design because of the water it's in the complete in the pond.
Variation change of design which we have submitted, and that is approved. Detailed design based on that need to be approved.
Actually the in-principle changes were approved. Detailed design need to be made, and then it could be got approved.
For few foundations, we have started the work, actually, where there is some clarity.
Vaibhav Shah
The other project?
K. Jalandhar Reddy
Other project is started, sir. They're not going on there.
There is some tree cutting problems are there, but they are solving, and they're going on.
Vaibhav Shah
Okay. Sir, for the two irrigation projects, the total around 4 ₹430 crore value, when do we expect to start the work on both of them?
It was quite a bit delayed.
K. Venkatram Rao
It may be in because there was land acquisition was there. Maybe in Q1 of next year, it will start.
Vaibhav Shah
We can do roughly 30, 40-odd percent in a year, because they were 24-month project, both of them?
K. Venkatram Rao
Ha, then if the land is available, for 30 years definitely we can do it, what around 30% to 40% in the first year.
Vaibhav Shah
Okay. Sir, we have seen some uptick in revenue for the two Karnataka HAM projects, Package 4 and Package 5.
Combined, what revenue would be expecting for '27 from those two projects?
K. Venkatram Rao
Both two projects is around maybe around you can say four around, because we have to maybe around ₹500 crores, actually, around ₹500 crores on both the projects.
Vaibhav Shah
The land issues are sorted in the both of them right now?
K. Venkatram Rao
In one project, land issue was there. One project is okay.
There we can execute. That's why we consider around 50% of the balance order, around ₹450 crores we can do actually, ₹450 to ₹500 crores.
Vaibhav Shah
Okay. Okay.
Thank you, sir. Those were my questions.
K. Venkatram Rao
Okay.
Operator
Thank you. Next, we have a follow-up question from Niteen S.
Dharmawat from Aurum Capital. Please go ahead.
Niteen S. Dharmawat
Thank you. Sir, just wanted to know what is the receivable amount now from the Telangana projects that we had earlier?
What is the recovery cycle we will be having over here?
K. Venkatram Rao
This Telangana out of ₹870 crores of receivable, around ₹677 crore receivables is from the government of Telangana, that is for the Package 4. If we consider unbilled also, total around ₹1,430 crores is there from irrigation, actually, from irrigation department from government of Telangana.
Niteen S. Dharmawat
Yes, sir. Go ahead.
K. Venkatram Rao
As far as collection is concerned, actually, as we've told you, we are trying to put, actually, pressure. We are expecting some part of collection by end of the March, actually, some part out of this ₹677 crores.
That's why we are putting a lot of pressure, actually. That's why we are working towards that.
Niteen S. Dharmawat
How much we are expecting, almost 50% or less than that, if we can have some estimate over there?
K. Venkatram Rao
Maybe around 50% we are expecting. 50% of the certified bill, whatever the certified bills are there around ₹677 crores, we are expecting somewhere around 50% in by
Niteen S. Dharmawat
Got it. Got it.
We are not filed any case for this, right? We are still negotiating with the government only?
K. Jalandhar Reddy
Case is already filed.
Niteen S. Dharmawat
In
K. Venkatram Rao
parallel, we are putting pressure also.
Niteen S. Dharmawat
Got it, sir. Thank you, sir.
Operator
Thank you. As there are no further questions, I would now like to hand the conference over to management for closing comments.
K. Venkatram Rao
Yes. Okay.
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.
Operator
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.
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