KN Agri Resources Limited Stock Analysis

Revenue growth of 7.9% YoY in Q3 FY26 (INR 512.65 Cr vs INR 475.11 Cr) and 8.1% YoY for nine months (INR 1328.65 Cr vs INR 1229.17 Cr) demonstrates sustained demand in agri commodities segment / Inventory management improved significantly with stock reduction of INR 0.64 Cr vs INR 65.57 Cr accumulation in Q3 FY25, indicating better working capital cycle and demand fulfillment / Cost of materials consumed as percentage of revenue improved from 70.6% in Q3 FY25 to 56.5% in Q3 FY26, showing better procurement efficiency or product mix shift / Agri commodities segment delivered strong profitability with PBIT of INR 9.69 Cr vs INR 13.33 Cr YoY (decline due to higher other expenses, not core operations), and segment assets grew 26.6% YoY to INR 584.01 Cr / Nine-month EPS of INR 7.62 remains relatively stable compared to INR 8.43 prior year, showing resilience despite cost pressures, with basic and diluted EPS aligned indicating clean capital structure

Profitability declined sharply with PAT down 26.4% YoY (INR 5.05 Cr vs INR 6.86 Cr) and nine-month PAT down 9.5% (INR 19.06 Cr vs INR 21.07 Cr) despite revenue growth, signaling severe margin compression / Other expenses exploded 40.9% YoY in Q3 (INR 44.56 Cr vs INR 31.63 Cr) and 65.7% for nine months (INR 110.95 Cr vs INR 66.92 Cr), eroding operating leverage and raising questions about cost control / Segment liabilities surged 148% QoQ from INR 74.08 Cr in Q2 FY26 to INR 221.08 Cr in Q3 FY26, and up 60% YoY from INR 138.05 Cr, indicating potential working capital stress or increased short-term borrowings / Power segment continues to drag performance with cumulative nine-month loss of INR 0.18 Cr and negative PBIT of INR 0.13 Cr in Q3, suggesting non-core asset underutilization / Purchase of stock-in-trade (SFG/FG) increased 5.9% YoY (INR 166.32 Cr vs INR 157 Cr) while revenue grew 7.9%, indicating lower conversion efficiency or inventory buildup risks in finished goods / Financial costs declined only marginally YoY (INR 2.21 Cr vs INR 3.05 Cr) despite better revenue, and nine-month finance costs of INR 7.26 Cr remain high relative to PAT of INR 19.06 Cr, limiting profit expansion

Q3 standalone revenue from operations increased to Rs 512.65 crore, up 17.1% QoQ (Rs 437.67 crore) and 7.9% YoY (Rs 475.11 crore). / 9M standalone revenue rose to Rs 1,328.65 crore from Rs 1,229.17 crore, an 8.1% YoY increase. / Q3 PAT improved sequentially to Rs 5.05 crore from Rs 4.54 crore in Q2 FY26 (+11.2% QoQ), and PBT rose to Rs 7.35 crore from Rs 6.23 crore (+18.0% QoQ). / Finance costs declined meaningfully: Q3 at Rs 2.21 crore vs Rs 3.05 crore YoY, and 9M at Rs 7.26 crore vs Rs 8.39 crore. / Agri Commodities segment remains profitable with Q3 segment EBIT of Rs 9.69 crore and dominates revenue generation (Rs 512.41 crore out of Rs 512.92 crore total income).

Earnings quality is under pressure as Q3 PAT fell 26.4% YoY (Rs 5.05 crore vs Rs 6.86 crore) despite higher revenue, and 9M PAT dropped to Rs 19.06 crore from Rs 21.07 crore (-9.5% YoY). / Margins remain very thin: Q3 standalone PAT margin is about 0.98% (5.05/512.92) and PBT margin about 1.43% (7.35/512.92), leaving limited cushion against cost volatility. / Other expenses increased sharply to Rs 44.56 crore in Q3 from Rs 31.63 crore YoY (+40.9%), indicating cost pressure. / Business concentration is high, with Agri Commodities contributing virtually all revenue (Rs 512.41 crore), while Power is small and loss-making (Q3 segment result -Rs 0.13 crore). / Balance-sheet pressure appears higher as consolidated segment liabilities rose to Rs 242.12 crore (vs Rs 141.77 crore YoY) and standalone segment liabilities to Rs 221.04 crore (vs Rs 138.29 crore YoY), with no accompanying cash-flow disclosure in this release.