Industry Context and Business Environment

The road sector is experiencing recalibration with subdued project awarding in initial months of FY27, following softness in FY26. During Q1 FY27, NHAI awarded approximately 107 kilometers of projects while execution moderated to around 638 kilometers.

The Union Budget has allocated close to INR 3.1 lakh crores to the Ministry of Road Transport and Highways, with road sector capex outlay up around 8% after two subdued years. NHAI has outlined a revised FY27 plan to award 54 highways and expressway projects covering 2,444 kilometers worth INR 1.8 lakh crores across 13 states.

Beyond roads, meaningful opportunities are emerging across railways and urban mobility. The government has allocated a record INR 2.93 lakh crores of capital expenditure to Indian Railways for FY27 for capacity augmentation, multi-tracking, freight corridors, safety, station redevelopment, and better rail connectivity. Andhra Pradesh received a record INR 10,134 crores railway allocation for FY27.

Company Business Updates

HAM Project Progress (as of 30th June 2026):

  • Ramanattukara to Valanchery: 100% completed
  • Valanchery to Kappirikkad: 100% completed
  • Magadi to Somwarpet: approximately 91.35%
  • Marripudi to Somvarappadu: approximately 86.03%
  • Mysore to Kushalnagara, Package 4: around 20%
  • Mysore to Kushalnagara, Package 5: around 18.28%

Equity Investment: The company has invested INR 595 crores out of INR 805 crores revised equity requirement for all existing HAM projects. Additional equity requirement of INR 210 crores to be infused as INR 125 crores in FY27 and INR 85 crores in FY28. The company may require further additional equity investment of around INR 510 crores for Chennai ECR and Telangana NHAI HAM projects.

New Projects: The company, along with JV partner Sushee Infra & Mining Limited, received a letter of acceptance from South Eastern Coalfield Limited for a coal mining project at Kusmunda in Chhattisgarh. The project has total value of INR 3,361 crores (excluding GST) to be executed over eight years.

Asset Sale: Completed transfer of 100% stake in KNR Ramagiri Infra Private Limited and KNR Palani Infra Private Limited to Indus Infra Trust. For KNR Ramagiri, the company invested INR 83 crores through equity and subordinate debt and received total consideration of INR 227 crores. For KNR Palani, invested INR 64 crores and received consideration of INR 295 crores, including INR 90 crores of cash surplus as EPC claim.

Credit Rating: CRISIL reaffirmed the company's long-term bank facility rating at CRISIL AA/Stable and short-term rating at CRISIL A1+.

Order Book Position

As of 30th June 2026, total order book stands at INR 8,667 crores. Including recently won 2 HAM projects and mining project, total order book stands at INR 15,234 crores.

Sector-wise Diversification:

  • Road sector: 38%
  • Irrigation projects: 11%
  • Pipeline project: 6%
  • Mining project: 45%

Client-wise Diversification:

  • Third-party clients: 71%
  • Captive HAM projects: 29%

Third-party order book split:

  • State government contracts: 24%
  • Central government: 46%
  • Other private party: 1%

The current order book (excluding mining project) is executable over 3 to 3.5 years. The company is targeting order inflow of INR 8,000-10,000 crores during FY27 comprising NHAI projects, irrigation projects, and other state government infrastructure works.

Financial Performance

Q1 FY27 Standalone:

  • Revenue: INR 436.7 crores
  • EBITDA: INR 65 crores
  • EBITDA margin: 15%
  • Net profit: INR 282.3 crores

Q1 FY27 Consolidated:

  • Revenue: INR 587.9 crores
  • EBITDA: INR 96.4 crores
  • EBITDA margin: 16.4%
  • Net profit: INR 80.7 crores

Balance Sheet Position:

  • Working capital days: 133 days (compared to 78 days as of March 2026)
  • Consolidated debt as of 30th June 2026: INR 1,975 crores (compared to INR 2,438 crores as of 31st March 2026)
  • Net debt to equity (consolidated): 0.9 (compared to 0.49 as of March 2026)

Management Guidance and Commentary

Revenue Guidance:

  • FY27: Targeting INR 2,200-2,300 crores (10-15% growth over FY26's ~INR 2,000 crores)
  • FY28: Targeting more than INR 3,000 crores

Margin Guidance:

  • Q3-Q4 FY27: EBITDA margin expected around 11-12%
  • FY27 average: 8-9% EBITDA
  • FY28: 11-12% EBITDA expected

Project Execution Timeline:

  • Chennai ECR and Telangana HAM projects: Expected to start in Q3 FY27
  • Kusmunda mining project: Expected to start within one month (September 2026)
  • Previous mining project (Chhattisgarh): Expected to start in FY28 (8-10 months for clearance)

Water Pipeline Project: Order book of INR 830 crores remaining. Targeting INR 300-400 crores revenue in FY27 with balance in FY28.

Telangana Irrigation Receivables Update

Outstanding of approximately INR 650 crores on Package 4 project, with revised estimate exceeding INR 700 crores. Positive discussions with Finance Ministry and Irrigation Department regarding installment payments of INR 80-90 crores per month. Management expects INR 400-500 crores recovery in FY27. Unbilled portion where revenue has already been recognized is INR 825 crores out of total irrigation book of INR 1,685 crores as of June 2026.

Capital Expenditure Plans

Q1 FY27 Capex: INR 14 crores

Mining Project Capex Requirements:

  • Kusmunda project: INR 500-600 crores equipment requirement
  • FY27 planned: INR 250-300 crores for Kusmunda
  • Banhardih project: Additional INR 300-400 crores equipment required

Total FY27 Capex Guidance: INR 350-400 crores

Other Business Developments

L1 Position: Approximately INR 1,500 crores worth of projects where company is L1 but LOA yet to be issued.

Battery Storage: Company is cautiously evaluating opportunities in battery energy storage systems segment due to competitive bidding environment and external risks.

Metro Projects: Company is building capabilities for elevated metro projects and has JV with NCC for such projects.

Buyback Consideration: Management confirmed buyback proposal is under consideration with final meeting pending.

Segment Revenue Breakdown (Q1 FY27)

  • Irrigation: 3%
  • HAM projects: 70%
  • EPC work: 25%
  • Water pipeline: INR 7 crores

Key Financial Positions (as of 30th June 2026)

  • Stand-alone debt: Nil
  • Consolidated debt: INR 1,975 crores
  • Stand-alone cash: INR 310 crores
  • Consolidated cash: INR 435 crores
  • HAM debtors: INR 178 crores
  • Telangana irrigation receivables: INR 1,300 crores (Package 4), INR 1,450 crores total irrigation receivables