CRISIL Research has affirmed 'A-/Stable' ratings on the bank facilities of KNR Constructions.

The rating continues to reflect the KNR group's strong execution capabilities and robust financial risk profile, marked by healthy capital structure and debt protection metrics. These rating strengths are partially offset by the KNR group's working-capital-intensive operations, susceptibility to intense market competition, and the customer concentration in its revenue profile, with the company deriving most of its revenue from the roads and highways segment.

The ratings also factor in the project risks emanating from the Walayar-Vadakkancherry project being undertaken by the company's fully owned subsidiary KNR Walayar Tollways (KWTPL) on a design-build-finance-operate-transfer (DBFOT [toll]) basis.

CRISIL believes that the KNR group's financial risk profile will remain robust over the medium term on the back of its healthy capital structure and cash accruals. The outlook may be revised to 'Positive' if the KNR group reports better-than-expected revenue while maintaining its profitability, and diversification in its project profile. Conversely, the outlook may be revised to 'Negative' in case of significant decline in the KNR group's revenue and profitability or high project implementation risk emanating from its increasing exposure to build-operate-transfer (BOT) projects, including the Walayar-Vadakkancherry project.

Shares of the company declined Rs 0.6, or 0.68%, to trade at Rs 88. The total volume of shares traded was 449 at the BSE (3.42 p.m., Tuesday).