KNR Constructions Limited submitted its Business Responsibility and Sustainability Report (BRSR) for FY26 to the BSE and NSE on September 3, 2026. The filing covers environmental, social, and governance disclosures for the period ending March 31, 2026.

The company reported a turnover of ₹20,967 crore and a net worth of ₹40,548 crore for the year. These figures trigger Corporate Social Responsibility (CSR) applicability under Section 135 of the Companies Act, 2013.

Workforce and Safety Metrics

As of March 31, 2026, KNR Constructions employed 2,542 permanent staff and engaged 598 permanent workers. The workforce composition remained heavily male-dominated, with men accounting for 99.65% of employees and 96.99% of workers.

Safety performance showed no lost-time injuries or fatalities during the year. The Lost Time Injury Frequency Rate (LTIFR) stood at zero for both employees and workers.

Environmental Impact

Energy consumption declined significantly in FY26 compared to the prior year. Total energy usage fell to 723,620 Giga Joules from 24,22,251 GJ in FY25. This reduction aligns with lower operational activity as several projects reached completion stages.

Greenhouse gas emissions followed a similar downward trajectory. Scope 1 emissions dropped to 54,447 metric tonnes of CO2 equivalent from 1,83,389 MTCO2e in FY25. Scope 2 emissions decreased to 4,022 MTCO2e from 7,580 MTCO2e.

Water withdrawal also contracted sharply. Total volume withdrawn fell to 3,54,210 kilolitres from 51,69,504 KL in the previous year. The company attributed this decline to reduced construction-related water requirements as projects neared completion.

Governance and Compliance

The board included two women directors, representing 33.33% of total membership. Key Management Personnel also featured one female member, constituting 33.33% of that group.

No monetary penalties or fines were recorded during the year. However, the disclosure noted a non-monetary show cause notice issued by the National Highways Authority of India regarding a subsidiary project. The matter was resolved through a settlement agreement involving construction of a viaduct at the subsidiary's cost.

What the Numbers Show

The sharp contraction in environmental metrics mirrors the operational cycle of infrastructure projects. With energy consumption falling by over 70% and water withdrawal dropping by nearly 93%, the data suggests a portfolio shift toward project completion rather than active construction phases. This transition reduced resource intensity but may signal lower near-term revenue generation from ongoing works.

KNR Constructions reported a significant decline in profitability for the first quarter of FY27, with consolidated net profit falling to ₹808 million compared to ₹1.23 billion in the corresponding period of the previous fiscal year. The company's topline performance remained largely stable, with revenue logging ₹5.9 billion, a marginal decrease from ₹6.12 billion year-on-year.

The primary pressure on earnings came from operating efficiency, as EBITDA dropped sharply to ₹964 million from ₹1.83 billion in the prior year's first quarter. This contraction resulted in a notable compression of margins, with the EBITDA margin shrinking to 16.40% from 29.86%.

Financial performance overview

The table below captures KNR Constructions' key financial metrics on a year-on-year basis.

What the numbers show

The divergence between revenue stability and profit decline highlights a severe margin compression event. While revenue contracted 3.6%, EBITDA fell by nearly half. This indicates that the drop in net profit was driven primarily by operational cost pressures or a lower-margin project mix rather than a loss of business volume. The widening gap between revenue retention and profit erosion suggests that current project execution costs are significantly higher than in the comparable prior period.

Management clarified that the reported EBITDA margin included a one-off benefit of approximately ₹46 million (net) derived from the sale of stakes in KNR Ramagiri Infra Private Limited and KNR Palani Infra Private Limited. Excluding this non-recurring gain, the underlying EBITDA margin stood at approximately 5.5%. The company received a total consideration of ₹227 million from the sale of its stake in KNR Ramagiri and ₹295 million for KNR Palani, which included ₹90 million in cash surplus as an EPC claim.

Order book and growth drivers

As of June 30, 2026, the company’s total order book stands at ₹15,234 crore, inclusive of recently won Hybrid Annuity Model (HAM) projects and a new mining contract. Excluding these recent additions, the core order book is ₹8,667 crore. The diversified order book comprises 38% road sector projects, 11% irrigation, 6% pipeline, and 45% mining.

Key developments include:

• Mining Expansion: The company secured a letter of acceptance for a coal mining project at Kusmunda, Chhattisgarh, valued at ₹3,361 crore (excluding GST) to be executed over eight years. Management expects this project to contribute approximately ₹150 million in revenue during FY27.
• HAM Projects: Physical progress on existing HAM projects varies, with Ramanattukara to Valanchery and Valanchery to Kappirikkad at 100% completion. Magadi to Somwarpet is at approximately 91.35%, while Marripudi to Somvarappadu is at 86.03%. Mysore to Kushalnagara packages 4 and 5 are at 20% and 18.28% respectively.
• Future Guidance: Management targets revenue of ₹2,200 million to ₹2,300 million for FY27, with an expected EBITDA margin of 8% to 9%. For FY28, the company aims to cross ₹3,000 million in revenue with an EBITDA margin of 11% to 12%.

Balance sheet and liquidity

The company maintains a strong credit profile, with CRISIL reaffirming its long-term bank facility rating at CRISIL AA stable and short-term rating at CRISIL A1+. Consolidated debt decreased to ₹1,975 million as of June 30, 2026, from ₹2,438 million in March 2026. However, net debt-to-equity rose to 0.9 from 0.49 in the previous quarter. Working capital days increased to 133 days from 78 days as of March 2026, reflecting ongoing receivable pressures, particularly from irrigation projects where outstanding receivables stand at approximately ₹1,450 million.

Management indicated positive discussions with the Telangana government regarding installment payments for outstanding amounts, expecting significant recoveries in FY27.