KNR Constructions keeps Rs 1,380.9472 crore recoverable

KNR Constructions Limited kept Rs 1,380.9472 crore of Kaleswaram Package 4 Irrigation Project receivables, retention amounts and unbilled amounts as recoverable at September 30, 2026, although collections had been stalled since March 2023; the balance increased by Rs 7.8544 crore from June 30, 2026.

Why is KNR Constructions treating Kaleswaram dues as recoverable?

KNR Constructions is treating the Kaleswaram Package 4 amount as recoverable because management says its assessment rests on contractual terms, internal assessments and discussions with the authority. The Rs 1,380.9472 crore disclosed at September 30, 2026 combines trade receivables, retention amounts and unbilled amounts, rather than representing trade receivables alone.

Collections on the Telangana irrigation project have been stalled since March 2023, according to the notes to the September 30, 2026 results. KNR Constructions said it has continued executing the project to comply with project-execution terms and to demonstrate that it was not at fault in executing the work.

Management said it is confident of recovering its present and future Package 4 dues as at September 30, 2026. That is management's stated assessment: the filing does not provide a collection date, settlement value, instalment plan or payment schedule for the Rs 1,380.9472 crore balance.

How did KNR Constructions' Kaleswaram balance change?

KNR Constructions' disclosed Package 4 balance increased to Rs 1,380.9472 crore at September 30, 2026 from Rs 1,373.0928 crore at June 30, 2026. The Rs 7.8544 crore increase occurred during a period in which the company said collections had remained stalled since March 2023.

The results do not split the September 30, 2026 Package 4 amount between trade receivables, retention money and unbilled revenue. Those components are disclosed only as a combined Rs 1,380.9472 crore amount, so the filing does not identify which component accounted for the increase from June 30, 2026.

Standalone current trade receivables were Rs 1,074.7034 crore at September 30, 2026, compared with Rs 871.4825 crore at March 31, 2026. The Package 4 balance is larger than that current trade-receivable line because the Kaleswaram disclosure also includes retention amounts and unbilled amounts.

What did the auditor say about KNR Constructions' recovery assessment?

KNR Constructions' statutory auditor drew attention to the Rs 1,380.9472 crore Package 4 dues in an emphasis-of-matter paragraph in its limited review report dated November 13, 2026. The auditor said management had considered the dues good for recovery on the basis of the relevant customer contract terms and management's internal assessments.

The auditor said management had informed it that it was fully confident of recovery, and stated that its conclusion was not modified in respect of this matter. The paragraph therefore highlights the judgement behind the September 30, 2026 carrying amount without changing the auditor's limited-review conclusion on the standalone results.

The report was conducted under Standard on Review Engagements 2410, which the auditor said provides moderate assurance and is substantially narrower in scope than an audit. It covered standalone results that included 17 joint operations, including three operations reviewed by other auditors with total assets of Rs 73.1432 crore at September 30, 2026.

The remaining 14 joint operations had total assets of Rs 853.6456 crore at September 30, 2026 and had not been reviewed by their auditors. The auditor said the related management-certified interim financial information was not material to KNR Constructions, while its conclusion remained unmodified regarding reliance on that information.

How does the Kaleswaram exposure relate to KNR Constructions' cash flow?

KNR Constructions reported a standalone net cash outflow from operating activities of Rs 463.8347 crore for the half year ended September 30, 2026, compared with an outflow of Rs 136.8666 crore in the half year ended September 30, 2025. The latest cash-flow statement recorded a Rs 511.8344 crore increase in trade and other receivables and prepayments.

The filing does not assign the Rs 511.8344 crore working-capital movement solely to Kaleswaram Package 4. However, the company separately disclosed the Rs 1,380.9472 crore Package 4 balance as recoverable while also stating that the project had generated no collections since March 2023.

Standalone cash and cash equivalents were Rs 40.2703 crore at September 30, 2026, down from Rs 70.6999 crore at March 31, 2026. Investing activities generated Rs 445.8955 crore during the half year, while financing activities used Rs 12.4904 crore and the overall cash-and-cash-equivalents movement was an outflow of Rs 30.4296 crore.

The operating cash-flow outcome should also be read separately from gains reported on subsidiary transfers. KNR Constructions recorded Rs 577.8693 crore of standalone exceptional income in the half year ended September 30, 2026 from transfers of three subsidiaries to Indus Infra Trust, while the Kaleswaram note disclosed no collection or settlement amount.

What has KNR Constructions said it will do on Kaleswaram?

KNR Constructions said it will continue executing Package 4 to comply with project terms and demonstrate that it was not at fault in execution. This is the operating action disclosed in the September 30, 2026 results in connection with the recovery assessment, rather than a stated payment-recovery timetable.

The filing does not disclose arbitration, litigation, a revised agreement, a settlement, or a date for collections to resume as at November 13, 2026. It also reports Construction and Engineering activities as a single operating segment under Indian Accounting Standard 108, so it does not provide separate Package 4 revenue, profit or cash-flow figures.

At the consolidated level, revenue from operations was Rs 1,188.1451 crore for the half year ended September 30, 2026, down from Rs 1,259.2276 crore in the corresponding 2025 period. Consolidated profit after tax and share of profit of associates and joint controlled entities was Rs 182.8330 crore, compared with Rs 228.0448 crore a year earlier.

Conclusion

KNR Constructions continues to carry Rs 1,380.9472 crore relating to Kaleswaram Package 4 as recoverable despite collections being stalled since March 2023. The balance rose by Rs 7.8544 crore from June 30, 2026, and the statutory auditor specifically highlighted management's recovery judgement without modifying its limited-review conclusion.

The next point to watch is whether KNR Constructions discloses resumed collections, a settlement, a payment timetable or a further change in the combined receivables, retention and unbilled amount. The company has stated that it will continue project execution under the contractual terms, but the November 13, 2026 filing contains no scheduled recovery milestone.