Strong revenue, margin squeeze; guidance held despite 40% growth

Revenue up 40% (consolidated), but PAT +46.4% inflated by ₹46 Cr exceptional gain; ex-exceptional, PAT ~+28%

Standalone EBITDA margin fell 163 bps YoY (12.65% → 11.02%); consolidated 320 bps (20% → 16.8%). Diesel/aggregate cost unhedged.

Bids pending, not won. Management conceded road pipeline 'has been low' and 'government awarding has been low.' Confident but no new commitments.

Standalone PAT declined 5.8% YoY (₹216 Cr → ₹203.63 Cr) despite 32.7% revenue growth. Consolidated growth overstated by ₹46 Cr dilution gain (2.25 percentage points).

O&G ₹270 Cr Q1 (new), T&D ₹110 Cr, BharatNet ₹400 Cr FY27 target. Real but early-stage, supply-chain risks (OFC costs rising, battery pricing volatile).

FY27 revenue guidance 15–20% maintained (prior: '15% growth'). ₹20,000–₹22,000 Cr inflow also held. Signals management does not expect Q1 run-rate to sustain; implies second half headwinds (delays, monsoon, competitive pricing).

New call quantified FY28 as ₹11,000–₹12,000 Cr (20% growth implied). Represents confidence in post-AD execution ramp, but dependent on 'macro stabilization.'

Prior FY-2026 call expected 10–11% EBITDA. Q1 delivered 11.02% (standalone). Despite 20–320 bps YoY fall and ongoing diesel costs, no margin cut. Implies belief in H2 cost stabilization or project mix improvement.

O&G ₹270 Cr Q1 (vs. zero prior year); BharatNet ₹400 Cr FY27 target; BESS and warehousing (₹450–500 Cr deploy FY27) progressing. Prior was aspirational; now real revenue.

Appointment dates (ADs) for major projects expected Oct–Dec; monsoon constrains Nov starts. Second half execution depends on AD timing. Cannot guarantee full-year 25–30% until ADs confirmed.

Macro factors (commodity prices, diesel) volatile. 10–11% is the right range. Marginal improvement possible, but current scenario suggests 10–11% is realistic.

Numbers seem achievable given government atmosphere and discussions. Projects will come in coming time. (But: bids not yet opened, outcomes uncertain.)

T&D ₹110 Cr; O&G ₹270 Cr. FY27 O&G target ~₹1,000 Cr+.

Bitumen fully compensated by government direct circular (over-and-above escalation). Diesel not compensated; we absorb cost. Power transmission metals (aluminium, copper) speculative volatility, spread over 2 years, no current escalation.

Competition will remain, but as project sizes increase and government focuses on BOT (capital-intensive), participation will be limited to strong balance sheets. Healthy opportunity ahead.

ADs expected Oct–Dec. Monsoon runs through October, so ground work starts Nov. Execution spreads across H2. Could see 25% growth if all goes well, but 15–20% is the estimate given risks.

BOT policy being finalized. New participation model (BOT + HAM hybrid). Once policy is final, projects will come. But yes, I've been watching reality for 2 years—it is not happening that much.

If we target 20% growth, ₹11,000–₹12,000 Cr. Margins expected in same 10–11% range, subject to macro conditions.

₹70 Cr cash distribution received Q1. Targeting 3–4 assets to transfer to InvIT this year.

Awaiting ROW (Right of Way). O&M started. Capex to begin October once ROW clears. ₹400 Cr revenue FY27 expected.

Largely O&G project. New sector; cash released only post-project completion. Expected to realize Oct–Mar, bulk by May '27 when project completes.

Maintained from prior guidance. Q1 delivered 32–40%, but second half expected to be slower due to project ADs (Oct–Dec), monsoon seasonality, execution cycles. Possible upside to 25% if ADs accelerate.

Newly quantified. Assumes acceleration post-AD ramp, new project contributions (BESS, Railway, BharatNet). Dependent on macro stabilization (commodities, geopolitics).

Q1 standalone delivered 11.02%, consolidated 16.8%. Margins compressed YoY; management cites diesel costs (unhedged), aggregate cost, commodity volatility. Bitumen compensated by govt circular (one-time benefit). Marginal improvement possible but not built into guidance.

CFO stated 'depends on how macroeconomic factors evolve.' Power transmission (aluminium, copper) costs to normalize over 2 years. Diesel hedging absent. Oil price/geopolitical risk remains.

Organic capex light; growth funded by subsidiary equity contributions and HAM/BoT cash deployment (₹900–1,000 Cr equity to HAM/BoT projects FY27).

Diversification into capital-light and capital-intensive segments. Equity deployment dependent on project AD timelines.

Agra-Gwalior AD expected Oct–Nov (repeated delays in past). Two HAMs AD Dec. ₹7,250 Cr of projects still awaiting AD. Delays push execution into Q4, compressing full-year growth.

Diesel and aggregate costs spiked, not compensated by escalation. Power transmission copper/aluminium unhedged; costs spread over 2 years, current margins pressured. Bitumen compensation via govt circular is one-time benefit.

O&G project trade receivables expected to remain high through May 2027 completion. Any project delay extends WC days beyond current 148-day level. Consolidated trade receivables ₹1,091 Cr (vs. ₹800–900 Cr historically).

Analysts pressed hard: NHAI/MoRTH announcements of large project pipelines for 3 years have not converted into orders. BOT policy is 'under finalization.' If policy is delayed or materially different from expectations, ₹28,000 Cr of pending bids may not open.

Q1 standalone PAT decline despite strong revenue growth reveals that earnings quality is deteriorating. Consolidated PAT inflated by ₹46 Cr exceptional gain. If margin compression continues, full-year PAT growth will underperform revenue growth significantly.