KNR Constructions Share Analysis: Recent Trends, Fundamentals & Outlook

The KNR Constructions share has been on investors’ radar after a dramatic rally and correction in the past year. In this analysis we’ll unpack everything an Indian investor needs to know: from recent price action and financial results to technical indicators, expert forecasts, SWOT factors, peer comparison and more. Whether you’re a long-term or short-term trader, we’ll break down the data and expert views on KNR’s stock so you can decide if it’s a buy at current levels.

Recent Stock Performance (1-Year and 5-Year)

Over the long term, KNR Constructions has delivered solid returns. TradingView data shows the KNR stock is up roughly 139% over the last 5 years. Much of the gain came after FY20 as the company’s revenues and profits grew. However, the past year has been volatile. KNR hit an all-time high around ₹415 (BSE) in mid-2024, but later corrected. Its 52-week range is roughly ₹192–415. As of May 2025, the stock is trading near ₹230. This means a year-to-date drop of about 32% and roughly 10% down in the last 12 months.

• One-Year Trend: After peaking in mid-2024, KNR’s price tumbled and spent much of late 2024/early 2025 moving lower. A slump in quarterly revenues and profit growth (see below) weighed on sentiment. The 1-year total return is about –10%.
• Five-Year Trend: Over the longer term, KNR outperformed many peers. A 138.7% gain over five years contrasts starkly with the 1-year loss. This shows the stock’s cyclicality: strong long-term growth but significant short-term swings.
• Trading Range: According to Moneycontrol, KNR’s 52-week high/low is ₹415.40/192.55. The current price (~₹230) is more than 45% below the high. These wide swings reflect changing industry conditions and company news.

Overall, the trend shows big upside over the past decade but recent weakness. In late 2024 the stock’s momentum faded. For example, trading platforms note the total return as –23.7% over 6 months and –9.7% over 1 year. This volatility is typical for midcap infrastructure stocks.

Fundamental Analysis

KNR Constructions’ fundamentals remain strong, with improving revenues and sharp profit growth in FY2024. Key points:

• Revenue and Profit: In FY2024 (year ended Mar’24), consolidated revenue was ₹4,429.49 Cr (vs ₹4,062.36 Cr in FY23). Net profit surged to ₹733.78 Cr (vs ₹440.22 Cr in FY23). This is roughly +9% topline growth and +67% jump in PAT. The big profit jump was partly due to one-time gains (see below). On a trailing-12-month basis, analysts report annual EPS ~₹43.2 and a low P/E of ~5.3×.
• Margins: In Q3 FY25 (Dec 2024) revenue fell YoY, but margins improved. For example, operating margin in Q3 was 27.4%, down from 47.2% (year-ago quarter). However, on FY24 numbers, net profit margin is ~16.6% (733/4429). This is very healthy for an EPC firm. Return on equity (ROE) has climbed to ~21.9% in FY24. These indicate KNR is fairly profitable compared to peers.
• Order Book: A key metric for infra firms is the order backlog. Analysts noted KNR’s order book was ~₹4,406 Cr as of Sep 2024. By Dec 2024 it was slightly lower at ₹3,888 Cr. (The decline reflects billing without equivalent new wins in H1 FY25.) The order book covers roughly 1.5 years of revenue at current run-rates, which is modest. The company has bid for new projects, and management expects significant inflows in H2 FY25. However, recent quarters showed minimal new awards. For perspective, peer NCC or IRB have larger backlogs.
• Balance Sheet: KNR has negligible debt (debt/equity ~0.35 in FY24) and cash. Book value per share is ~₹124, so the stock trades around 1.5× PB, low for the sector. The company maintains ~15-16% EBITDA margins (as guided for FY25), and has a dividend yield of only ~0.11% – dividends are tiny.
• One-Time Items: A key reason profits spiked in FY24 was arbitration income and claim settlements. In Q2 FY25, KNR recognized ~₹28 Cr (plus ₹43 Cr interest) from an arbitration award in Odisha. Such items (often labelled “exceptional”) boosted net income. Analysts have stripped these out to compare core earnings. The fact that profits can swing on these one-offs is a risk to watch.

In summary, KNR’s business saw steady revenue growth but an outsized PAT jump in 2024. Margins and ROE are high, debt is low, and valuations are cheap (P/E ~5× vs sector ~31×). However, the order book is modest and execution is slowing, which tempers the outlook. For detailed ratios and financials, see Moneycontrol or the company’s annual report.

Technical Analysis

From a technical perspective, KNR Constructions has shown mixed signals:

• Moving Averages: Short-term moving averages (5-day, 10-day, 20-day) are trending above the current price. For instance, the 20-day SMA is ₹233 and 50-day SMA ₹232, both above today’s price (₹228). This places the stock in a short-term downtrend (sell signals on MA5/MA10/MA20). In contrast, the longer 100-day (₹224) and 200-day (~₹226) SMAs are below the price, suggesting those longer-term levels could act as support. In sum, technically the stock is below most short/medium MAs (bearish), but still above the big MAs.
• RSI and MACD: According to Investing.com data, the RSI(14) is about 35.8 (as of May 22, 2025), which is near the oversold boundary (30). A value below 40 often signals an oversold condition for many traders. The MACD(12,26) is slightly negative (–0.21), indicating recent momentum is weak. In fact, the technical summary shows “Sell” for both RSI and MACD. Other indicators like ADX (~38) also signal a strong downward trend, and Williams %R is extremely oversold. Together, these suggest the stock has been under selling pressure and may be nearing oversold levels in the short term.
• Chart Patterns: On daily charts, KNR made a series of lower highs after hitting ₹415, and has been consolidating in the ₹230 region. Recent lower volumes on down-days hint at lack of strong selling interest now, which some technicians read as a potential bottoming sign. However, a break below the 200-day SMA (~₹226) could open another slide. Conversely, a sustained move above the 50- or 20-day SMA (around ₹232-233) would indicate resumption of strength.
• Volume & Volatility: Average daily volume has been healthy (20D average ~1.43 million shares). ATR (14) is relatively low (2.56), indicating moderate volatility after the big swings in 2024.

Overall, the charts show KNR is currently in a downtrend but technically oversold. Traders might look for a bounce near the 100/200-day moving averages or wait for clear reversal signals. As one FAQ notes below, daily indicators are “Neutral” to “Sell”, but a contrarian might see value if the fundamental outlook improves.

Analyst and Brokerage Forecasts

Broker research on KNR Constructions is cautiously optimistic, though forecasts vary:

• Motilal Oswal (Feb 2025): Reiterated a Buy call with a target price of ₹300. This implies >25% upside from current levels. Their note adjusted for one-time items, but noted revenue slips and advised patience.
• Axis Securities (Nov 2024): Had a HOLD rating (changed from Buy) with a TP of ₹285. They cited the still-weak orderbook (≈₹4,406 Cr) and execution delays, but acknowledged strong Q2 earnings and one-offs. Axis expected FY25 revenue to decline before recovery.
• HDFC Securities (Nov 2024): Very bullish – Buy rating, TP ₹374. They highlighted KNR’s robust Q2 results, large order pipeline (including HAM and state projects), and strong balance sheet. HDFC’s model assumes steady FY25 revenue and picks a Sep-26 EPS multiple to justify ₹374.
• Consensus/Other Brokers: Trendlyne reports consensus 12-month targets averaging ~₹310 (based on 5 analysts), about +35% from the ₹230 range. JM Financial (Nov ’23) had a ₹330 TP, and Motilal’s earlier Jan ’24 call was ₹325 (see ET). These older calls were set when KNR was much lower.

In summary, most analysts have a moderate to bullish stance. Even the cautious Axis TP of ₹285 suggests only a small downside from here, while bullish houses see 30–60% upside. The Economic Times also covered HDFC’s call, noting that analysts expect KNR to bid aggressively for upcoming projects. It’s worth reading the detailed reports for assumptions (e.g. HDFC’s guidance or Motilal’s adjustment of Q3 EBITDAs).

For investors, the takeaway is that pros see value at current multiples, assuming KNR can win new orders. The average target ~₹310–330 indicates analysts believe the stock is undervalued now. However, these forecasts hinge on KNR securing contracts and maintaining margins as guided.

SWOT Analysis

A SWOT (Strengths, Weaknesses, Opportunities, Threats) gives a balanced view:

• Strengths:
  • Diversified EPC Portfolio: KNR handles highways, irrigation, pipelines and urban projects. This spreads risk across segments. Their expertise in complex HAM (Hybrid Annuity Model) projects is valued.
  • Strong Profitability: High profit margins and ROE (~22% in FY24) are major pluses. They consistently operate with EBITDA margins 15-16%. Low debt and good equity base (₹125 BVPS) give financial flexibility.
  • Track Record: Incorporated in 1995, KNR has completed many large road and irrigation jobs. Institutional lenders and stakeholders trust the management.
  • Upside Potential: The stock’s low valuation (P/E ~5x) and significant price pullback mean it can outperform if catalysts arrive.
• Weaknesses:
  • Thin Order Book: The visible order pipeline has been weak. As of Dec’24 it was ~₹3,888 Cr, not enough to keep revenues growing in FY25. Management even guided for year-on-year revenue decline. This limited visibility is a concern.
  • Execution Delays: Some projects (like irrigation contracts) have seen delays and pending approvals, impacting current quarters. Q3FY25 saw a 48% QoQ revenue drop, highlighting volatility in execution.
  • Dependence on Few Segments: Most revenue comes from road/turnpike projects (including HAM). Any slowdown in highway awards or NHAI budgets can hurt growth.
  • One-offs Volatility: Profit growth has been boosted by irregular items (arbitration income, JV profits). These won’t recur predictably, so core earnings growth is weaker than headline PAT suggests.
• Opportunities:
  • Infrastructure Push: Government plans massive road, irrigation and urban water projects. For example, Andhra Pradesh earmarked ₹15,000 Cr for capital city development (likely involving KNR) and Telangana plans large irrigation investments. These bode well for future orders.
  • Strong Pipeline: Brokers note KNR is bidding aggressively for NHAI tenders (pipeline ~₹2 lakh Cr nationally). KNR expects ₹5-6,000 Cr of new orders in H2 FY25. Winning these could reignite revenue growth.
  • Diversification: Management is eyeing other segments (e.g. water infrastructure, MSRDC projects in Maharashtra) to reduce reliance on NHAI. Successful diversification could broaden revenue and reduce risk.
  • HAM Assets: KNR has invested equity in several HAM projects. These will start giving annuity payouts in coming years, providing steady income.
• Threats/Risks:
  • Project Awards Slowdown: Any further delays in project approvals or tender awards will hit growth. “Lower project awarding and delay in appointed date may impact revenue growth projection,” warns Axis. Indeed, KNR had no new order wins in H1FY25. If this persists, guidance won’t be met.
  • Input Costs & Inflation: Rising costs of cement, steel or labor can compress margins. Axis cautioned that “higher input costs may impact margins”. Past projects have suffered from cost overruns.
  • Competition: The road sector is fiercely competitive. Other players like IRB Infra, PNC Infratech, Dilip Buildcon, etc. aggressively bid. Strong competitors may undercut KNR’s bids or win projects first. HDFC specifically noted “aggressive competition” as a factor.
  • Regulatory Changes: Changes in government policies (e.g. BOT vs HAM, toll norms) can affect project returns.
  • Stock Volatility: KNR is a midcap; its share price can swing widely. Market sentiment in the infra segment (often led by L&T, IRB) will influence KNR too.

The SWOT points summarize why analysts have mixed views. Strengths and opportunities underpin the Buy ratings, while weaknesses and threats justify caution.

Risks for Investors

Building on the SWOT, here are key risks to keep in mind if investing in KNR stock:

• Revenue Growth Risk: As noted, KNR has guided for lower FY25 revenues due to its current order book. If new orders don’t materialize or are delayed, revenue could fall more than expected. Last year’s quarterly results show how revenue dropped ~56% QoQ in Q3 FY25. Investors need to watch order wins carefully.
• Margin Erosion: Even if revenue holds up, profit margins could shrink. Higher fuel, cement or steel prices (common in 2022–25) can eat into margins. Input cost pressure has tripped up other contractors this cycle. A reminder from Axis: “Higher input costs may impact margins”.
• Execution Risk: Large EPC firms sometimes face project delays, litigations or cancellations. The arbitration case in Odisha (resulting in some unexpected income) also indicates projects can get stuck and require legal resolution. Delays also tie up working capital – KNR’s receivables and cash-flow management will matter.
• Market Risk: Infra stocks can be cyclical. Macro slowdown or rising interest rates might reduce government infra spend, affecting company fundamentals and share price.
• Valuation Trap: Though the stock looks cheap by P/E (≈5x) and P/B, that cheapness reflects these risks. A value investor should confirm the turnaround in orders is real before assuming KNR will re-rate.
• Liquidity and Volatility: As a mid-sized stock (market cap ~₹6,400–6,600 Cr), KNR can be more volatile and less liquid than largecaps. Short-term traders should be prepared for sharp price swings in response to news.

Investors should balance KNR’s attractive fundamentals against these risk factors. Due diligence on upcoming order wins and results (especially Q4/FY25) is crucial.

Comparison with Infrastructure Peers

Where does KNR stand among its peers? The infrastructure/construction space has several listed players. A few points of comparison:

• Valuation: KNR’s P/E (~5.3×) is much lower than many peers. For example, IRB Infra (road BOT specialist) trades at ~4.8× (also low); but bigger players like L&T or NCC are in double digits. The sector average P/E is ~30.9×. KNR’s low P/E suggests the market is skeptical of near-term growth.
• Market Cap & Scale: With market cap ₹6,400 Cr, KNR is midcap. Major peers: IRB (₹30k Cr as per Groww data) and Rail Vikas Nigam (~₹85k Cr) are larger. Smallcaps like Sadbhav Engg or Welspun (pipe/road) are of comparable or smaller size.
• Growth & Returns: In a 2-way comparison, BlinkX notes that over 5 years NCC’s market cap grew much faster than KNR’s (NCC +66% CAGR vs KNR +20% CAGR). This implies peers have recently outperformed KNR. However, KNR’s five-year stock returns (~139%) have been strong.
• Profit Margins: KNR’s ROE/ROCE (~22-26%) is among the higher end, thanks to its mix of HAM projects and low leverage. Many pure EPC players have lower ROE (10-15%).
• Dividend: KNR yields only 0.11%. In contrast, some peers (like IRB Infra) occasionally yield ~1% with interim dividends. The low payout means KNR retains cash for projects, but income-seeking investors get little.
• Stock Performance: Over the past year, many infrastructure stocks have been under pressure (e.g. IRB down ~10-20%). KNR’s ~–10% yearly return is broadly in line with a weak sector, though some peers (NCC, PNC, etc.) have outperformed or underperformed based on project wins/losses.

In short, KNR looks cheaper than most peers and has excellent profitability, but it also faces stiffer headwinds in orderflow than some others. Investors comparing infrastructure stocks should weigh KNR’s low valuation and high margins against its lower order backlog and smaller scale.

Suitability for Different Investor Profiles

Long-Term Investors: KNR Constructions could appeal to patient investors. Its strong ROE, low valuation, and growth prospects in infrastructure mean it has potential for high returns once orders pick up. If you can tolerate volatility, buying at a P/E ~5-6x offers a margin of safety. The company’s track record and financial strength make it plausible for a multi-year gain as projects convert to revenue. Long-term investors should watch the order inflow closely – sustained improvement (e.g., winning those NHAI HAM projects) could justify the analysts’ bullish targets.

Short-Term Traders: In the near term, KNR can be choppy. Technicals suggest short-term resistance around ₹232-235 (recent highs) and support near ₹224 (100/200 DMA). A breakout above ₹235 could trigger a rally, while a drop below ₹226 might lead to further declines. Short-term traders might capitalize on these moves. Also, keep an eye on news catalysts – for example, if a big order win is announced, the stock may jump. However, without fresh news, momentum may stay weak. RSI and volume now suggest a neutral-to-bearish stance. Day-traders might scalp swings, but always use tight stops given volatility.

Conservative Investors: KNR is not a classic conservative pick. Infrastructure stocks can be risky and KNR’s profits depend on lumpy orders. A conservative investor seeking stable returns might prefer blue-chip construction giants or dividend-paying utilities. KNR’s low dividend yield (0.1%) also means it’s not income-oriented. That said, its strong balance sheet and project backlog (if it materializes) do offer some protection. A very risk-averse person should either avoid or hold only a small position in KNR.

Aggressive/Growth Investors: If you like high-risk/high-reward, KNR could fit the bill. The stock’s cheap valuation and analysts’ high targets (up to ₹374) mean there is upside potential if KNR captures upcoming opportunities. An aggressive investor may overweight KNR in expectation of an infrastructure boom. But they must be ready for swings: the share can drop sharply on execution hiccups, as happened Q3. In summary, aggressive investors should do this only as part of a diversified portfolio.

In short, KNR is best suited to investors with a bullish view on Indian roads/infra who can handle midcap volatility. Long-term holders stand to gain if KNR converts bids into revenue. Short-term traders might exploit technical setups. But those with low risk tolerance or looking for steady dividends should consider other stocks.

How does KNR Constructions compare to its peers?

KNR is a midcap in the infrastructure sector. Compared to peers like IRB Infra, NCC or PNC Infratech:

• Its P/E (~5×) is much lower (peers often 10–15× or more).
• Profitability (ROE ~22%) is higher than many peers.
• Market cap (~₹6,400 Cr) is smaller than IRB (₹30,000 Cr) or NVIA (₹85,000 Cr).
• Dividends: KNR yield is ~0.1%, lower than IRB’s ~0.6% (Q4FY24 declaration).
• Growth: KNR’s recent growth has trailed big players, but it still has strong execution margins. Each peer has its own order book and project mix, so check specific competitor data. Overall, KNR trades at a cheaper valuation with comparable project risk.

(Note: Moneycontrol, Stockesta and ET provide free stock info and are frequently updated with the latest news and analyst calls.)

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