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KNR Constructions: Asset monetisation to strengthen Balance sheet; Order inflow key for growth ahead

ICICIdirect Research 26 Dec 2025 DISCLAIMER

KNR Constructions has signed share purchase agreements with Indus Infra Trust for the sale of its entire 100% stake, including subordinate debt, in four road SPVs with total proceeds of about ₹1,543.2 crore, including estimated cash surplus of ₹ 144 crore, against an investment of ₹566.8 crore. The deal implies valuations of ~2.7x price to book, which is very good and superior to peers’ asset sale deal. The proceeds are likely to strengthen balance sheet and the divestment is expected to be completed by September 2026.
We note that as of Q2FY26, KNR Constructions' order book stood at ₹ 8,216 crore, implying 2.7x book to bill (less than 2x excluding longer execution period mining order). It also received one order worth ₹ 319 crore in Q3. The management is targeting ₹8,000- 10,000 crore of order inflows in FY26. Given the low order book, inflows are key for KNR for revenues visibility. Furthermore, the focus will also be on recovery of dues in Telangana worth ₹ 1300+ crore.
While we like the company given the superior execution history and efficient monetisation, we have HOLD rating with a TP of Rs 200 as the performance of FY26 is likely to be weak with ~35%+ revenue decline, while FY27, growth recovery hinges on order inflows.

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