Strong YoY growth masks margin squeeze from T&D integration

Delivered: 924.3 Cr, 53.2% YoY; 119.0 Cr, 37.7% YoY. Exact match.

OPM 18.8% = 18.76% calculated. Margin slightly compressed YoY. Standalone improved, consolidated down.

Down from historical 19%+ standalone. Target is walkdown, not maintenance of prior guidance.

Revenue -16.2% QoQ, PAT -23.6% QoQ. Sharp sequential decline not addressed or explained.

After ₹925 Cr Q1 execution, ₹5,300 Cr remaining. Math implies ~₹350–440 Cr/qtr avg, below Q1 ₹925 Cr run rate. Visibility plausible but execution profile unclear.

Prior: 'deliver higher margins (19%+).' This quarter: target 15% EBITDA for FY27. APSPL acquisition (11% margin) and competitive pressure cited as drivers.

55% stake in APSPL (₹108K MT/annum galvanization capacity). Adds ₹20K Cr pipeline but increases consolidated margin drag. Newly consolidated business.

Prior calls: soft guidance on 2.8 GW + 36 GW pipeline execution. This call: 'not giving any kind of guidance.' Only soft margin target (15%) + order book visibility (₹5.3K Cr, 12–15 months).

Management disclosed 30–40% of order book from group entities. Raises questions on third-party pipeline sustainability.

2.4 GW is pure solar EPC; 200 Cr is BESS EPC. Total 2.6 Cr standalone. With APSPL, 5.3 Cr book executable over 12–15 months, or 18 months. Pipeline also being pursued.

Yes, consolidating lower-margin T&D business causes drop. Standalone EPC margin maintained 2-year average.

Helps—more projects likely to come before deadline. 1Q order inflows up 20% QoQ. Already chasing 27 GW domestic + 10 GW international pipeline.

75% debt financing. Interest will come in future quarters. But strategic importance is to mix solar EPC with T&D for complete value chain and cross-sell opportunities.

Margin improvement is ongoing exercise. Will see continuous improvements in coming quarters. Transmission company doing all kinds of projects mentioned in opening remarks.

Competition is good for industry. We only take profitable projects fitting our risk/reward metrics.

Supply side pressure is there. By combining solar EPC + transmission EPC, we can serve multi-year demand across both value chains and consolidate the business.

No. Business will expand, margins will improve by combining both entities. APSPL is mature 20-year-old company with good revenue stream.

Improvements in process/cost reduction. Things will evolve; we'll tell you more precisely next quarter. Scope for improvement in any business.

₹200 Cr unexecuted BESS order (combination of orders, not single order). Margins in line with overall company expectations when order taken.

Adding small plants (25 MW, 10 MW) where opportunity & land availability exists. Keeps revenue stream flowing; builds IPP asset base.

Similar capability to last year (₹3,300 Cr revenue). Can enhance further. ₹5,300 Cr order book + new orders likely in 9 months to execute during year.

Not giving formal guidance. But: EPC maintained ~19% last year; with APSPL, targeting ~15% for FY27. Details next quarter.

₹20K Cr T&D pipeline being pursued. Execution timeline 18–24 months typical (varies by distance/terrain); could be 9–12 months for shorter lines.

60–90 days. Progressive billing based on project progress; advance received at start. Not completion-based.

30–40% from group entities. Depends on group initiative end-use. Orders for us for execution get eliminated at consolidation; external group orders come as revenue.

Yes, can take up any size project. Already executing 2 GW + 1 GW in various states. Can execute as much as possible given clearances.

Actively looking for EPC opportunities. In discussions. Building capability; taking on required people. No team/infrastructure currently in place.

Combination of orders, not single enhancement. APSPL does all kinds of projects (transmission, substation, HVDC, etc.).

Difficult to give thumb rule. Depends on order specs (2–4 hour storage, varying MW). Differs per project.

Includes ₹2.6 Cr standalone + ~₹2.7 Cr APSPL. After ₹925 Cr Q1 execution, ~₹350–440 Cr avg per qtr implied. Below Q1 run rate.

No formal FY27 revenue target. Soft guidance based on historical capability. Order pipeline (27 GW solar, ₹20K Cr T&D) to be chased.

Down from 19%+ standalone EPC historically. APSPL ~11% margin drag cited. Target is at prior 'conservative' long-term guidance floor, not an upgrade.

Margin improvement on APSPL deferred to 'coming quarters.' No specific roadmap or timeline provided.

55% APSPL stake only 12 days consolidated in Q1. Margins ~11% vs. 15% target. No concrete roadmap for margin improvement disclosed.

30–40% of ₹2.6 Cr standalone order book from group entities. Unclear if true third-party contracts or captive internal IPP development. Raises questions on order book quality.

Revenue –16.2% QoQ (₹924 Cr Q1 vs ~₹1,105 Cr implied Q4 FY26), PAT –23.6% QoQ. Decline unexplained by management. Raises sustainability questions.

Prior guidance: 'deliver higher margins (19%+).' This call targets 15% for FY27, citing APSPL drag and competitive pressure. Represents downgrade from historical guidance.

₹20K Cr T&D pipeline being pursued, but no firm orders booked yet. 18–24 month typical execution timeline. Conversion to orders uncertain.