KNRCON - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 05 Nov 25, 7:43 am

Investment Rating: 3.9

🚧 KNR Constructions is a value-driven infrastructure play with strong return metrics and zero debt. Ideal entry zone: ₹175–₹185.

🔷 Positive

• 📈 ROCE of 27.4% and ROE of 20.5% reflect excellent capital efficiency and profitability.
• 📉 Debt-to-equity ratio of 0.00 indicates a clean balance sheet with minimal financial risk.
• 📊 PEG ratio of 0.30 suggests attractive valuation relative to growth potential.
• 📉 Stock P/E of 7.84 is significantly below industry average (22.1), indicating undervaluation.
• 📈 EPS of ₹22.9 supports strong earnings visibility.
• 📈 FII holding increased by 0.46%, showing foreign investor confidence.

⚠️ Limitation

• 📉 Quarterly PAT dropped 61.7% from ₹75.2 Cr to ₹51.3 Cr, indicating earnings volatility.
• 📉 MACD at -3.65 and RSI at 31.1 suggest bearish technical momentum.
• 📉 Current price below DMA 50 and DMA 200 reflects weak trend support.
• 📉 DII holding declined by 3.59%, signaling cautious domestic sentiment.
• 📉 Dividend yield of 0.14% offers minimal income for long-term holders.

📉 Company Negative News

• 📉 Q2 FY26 PAT declined sharply due to delayed project execution and lower billing in EPC segment.

📈 Company Positive News

• 🚧 KNR Constructions secured ₹1,500 Cr worth of new road contracts in Q2 FY26, boosting future revenue visibility.
• 📈 Analysts expect margin recovery in H2 FY26 as execution picks up and monsoon impact fades.

🏗️ Industry

• 🛣️ Infrastructure and road construction benefit from government capex push and NHAI-led highway expansion.
• 📈 Industry P/E of 22.1 supports moderate valuation expectations for quality EPC players.

✅ Conclusion

• 📌 KNR Constructions is a fundamentally strong EPC player with high ROE/ROCE and zero debt.
• 🎯 Ideal entry zone: ₹175–₹185 based on support levels and valuation comfort.
• ⏳ If already holding, maintain for 3–5 years to benefit from order book execution and margin recovery.
• 🚪 Exit strategy: Consider partial exit near ₹340–₹355; reassess if PAT growth remains inconsistent or RSI drops below 30.

Sources: No recent news found as of November 2025.