KNR Constructions posts Rs 1,292.76 crore operating cash

KNR Constructions generated Rs 1,292.76 crore of net operating cash in the half year ended September 30, 2026, against a Rs 421.83 crore operating cash outflow a year earlier, as working-capital movements contributed Rs 1,271.99 crore. The company repaid Rs 1,319.48 crore of borrowings, while cash and cash equivalents declined to Rs 88.60 crore.

How did KNR Constructions generate Rs 1,292.76 crore of operating cash?

KNR Constructions generated Rs 1,292.76 crore of net cash from operating activities in the half year ended September 30, 2026, compared with a net outflow of Rs 421.83 crore in the half year ended September 30, 2025. The turnaround came despite profit before working-capital changes declining to Rs 130.94 crore from Rs 136.93 crore in the previous-year period.

Working-capital adjustments produced a Rs 1,271.99 crore inflow in the September 2026 half year, against an outflow of Rs 364.16 crore a year earlier. Cash generated from operations consequently reached Rs 1,336.27 crore, and income taxes paid of Rs 43.50 crore reduced that total to the reported operating cash inflow of Rs 1,292.76 crore.

The pre-working-capital cash calculation included Rs 29.56 crore of depreciation and amortisation, Rs 100.73 crore of finance costs and Rs 95.35 crore of allowance for expected credit losses on trade receivables. It also included a Rs 168.65 crore exceptional-item adjustment and a Rs 94.94 crore modification gain or loss adjustment, according to the consolidated cash-flow statement.

What caused KNR Constructions' working-capital movement?

KNR Constructions recorded a Rs 1,271.99 crore cash inflow from the decrease in trade and other receivables and prepayments during the half year ended September 30, 2026. The same cash-flow line showed a Rs 364.16 crore outflow in the comparable 2025 half year, making it the principal change behind the year-on-year improvement in operating cash flow.

Inventories used Rs 41.81 crore of cash in the September 2026 half year, compared with a Rs 1.84 crore inflow in the prior-year period. Other payables used Rs 24.85 crore, compared with a Rs 145.79 crore outflow a year earlier. These movements, combined with the receivables and prepayments change, resulted in the Rs 1,271.99 crore overall working-capital contribution.

The balance sheet reported non-current trade receivables of Rs 1,911.73 crore at September 30, 2026, down from Rs 3,199.54 crore at March 31, 2026. Current trade receivables, however, increased to Rs 813.61 crore from Rs 808.36 crore over the same dates. The filing does not provide a line-by-line reconciliation between the cash-flow movement and each balance-sheet receivables category.

KNR Constructions also disclosed Rs 1,380.95 crore of trade receivables, retention amounts and unbilled amounts related to Telangana's Kaleswaram Package 4 Irrigation Project at September 30, 2026. This amount was Rs 1,373.09 crore at June 30, 2026, and collections have been stalled since March 2023. Management said it is confident of recovering present and future dues based on contractual terms, internal assessments and discussions with the authority.

How much debt did KNR Constructions repay?

KNR Constructions reported Rs 1,319.48 crore of repayment of borrowings in the half year ended September 30, 2026, compared with Rs 327.11 crore in the corresponding 2025 period. It recorded borrowing proceeds of Rs 61.27 crore, finance-cost payments of Rs 96.44 crore and a net financing cash outflow of Rs 1,354.66 crore.

Consolidated borrowings stood at Rs 1,179.76 crore at September 30, 2026, down from Rs 2,437.60 crore at March 31, 2026. Non-current borrowings fell by Rs 1,205.38 crore to Rs 1,064.40 crore, while current borrowings fell by Rs 52.46 crore to Rs 115.36 crore.

The Rs 1,257.83 crore decline in balance-sheet borrowings does not exactly match the Rs 1,319.48 crore cash-flow repayment figure. Cash-flow repayments, borrowing proceeds and balance-sheet borrowings are reported through different statement presentations, and KNR Constructions did not disclose a reconciliation between the two movements.

Why did KNR Constructions' cash balance fall despite operating inflow?

KNR Constructions ended September 30, 2026 with Rs 88.60 crore of cash and cash equivalents, down Rs 97.83 crore from Rs 186.43 crore at the beginning of the financial year. The Rs 1,292.76 crore operating cash inflow was exceeded by Rs 1,354.66 crore used in financing activities and Rs 35.93 crore used in investing activities.

Investing activities changed from a Rs 29.53 crore inflow in the half year ended September 30, 2025 to a Rs 35.93 crore outflow in the September 2026 half year. Purchases of property, plant and equipment, capital work-in-progress and investments used Rs 224.71 crore, while proceeds from sale or purchase of investments were Rs 128.93 crore and interest received was Rs 10.09 crore.

Cash and cash equivalents at September 30, 2026 comprised Rs 88.42 crore of bank balances and cheques in current accounts and Rs 17.73 lakh of cash in hand. Separately, KNR Constructions reported Rs 143.79 crore of bank balances other than cash equivalents, compared with Rs 190.87 crore at March 31, 2026.

Conclusion

KNR Constructions' September 2026 half-year cash flow was driven primarily by a Rs 1,271.99 crore working-capital release rather than higher pre-working-capital cash generation, which declined to Rs 130.94 crore from Rs 136.93 crore. The resulting Rs 1,292.76 crore operating inflow supported Rs 1,319.48 crore of borrowing repayments and coincided with total reported borrowings falling to Rs 1,179.76 crore.

The next item to watch is collections from Kaleswaram Package 4, where Rs 1,380.95 crore of receivables, retention amounts and unbilled amounts remained outstanding at September 30, 2026 after collections had stalled from March 2023. Management has stated confidence in recovery, but the filing does not disclose a collection timetable or a reconciliation between debt repayments in the cash-flow statement and the balance-sheet decline in borrowings.