Owing to the recent price performance, we downgrade KNRC to NEUTRAL with increased SOTP of Rs 255/sh. KNRC delivered muted 2QFY18 revenues at Rs 3,933mn, 10.1% below our estimates. This was achieved despite GST-related headwinds. EBIDTA margins expanded 598bps YoY to 21% (highest over the last 6Q), owing to excess provision reversals in projects nearing completion. The B/S is healthy, with standalone net debt at Rs 1.28bn (net D/E at 0.13x, 0.01x adjusting for promoters loan of Rs 1.2bn).