G R Infraprojects Limited (GRINFRA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the GR Infraprojects Limited Q1 FY '26 Earnings Conference Call hosted by HDFC Securities Limited. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involves risks and uncertainties that are difficult to predict. [Operator Instructions] We have the management from GR Infraprojects Limited, Mr. Ajendra Kumar Agarwal, Managing Director; Mr. Anand Rathi, Group CFO. I now hand the conference over to Mr. Parikshit Kandpal. Thank you, and over to you, sir.

Thank you, Anshi. Without taking any further time, I would like to hand the floor to Ajendraji for his opening remarks. Over to you, sir. Thank you.

Thank you, Parikshitji. Ladies and gentlemen, a very good afternoon. I welcome you all to the earnings call of GR Infraprojects Limited for Q1 of financial year '26. Let me introduce the leadership team present on this call. We have with us Mr. Anand Rathi, the Group CFO; and Mr. Ankit Maheshwari, Deputy CFO of the company. First, let me provide the key highlights on our Q1 performance, followed by recent development in the infrastructure sector and then by question-and-answer session. Revenue from operation in first quarter of fiscal 2026 stood at INR 1,826.14 crores as against INR 1,896.54 crores in the corresponding period in previous financial year. The EBITDA margin, excluding other income, for the current quarter stood at 12.65% as against 13% in the corresponding period in previous financial year. During the quarter, the company has repaid the debt of INR 137 crores, which has resulted in improved debt-equity ratio to 0.04, which is one of the best in the sector. During July 2025, the company has been declared L1 for 1 Road EPC project of INR 245 crores. As of today, 3 road projects of INR 4,500 crores approximately are having L1 status. As on date, the order book stood at INR 23,700 crores approximately. As on the date, the company has 24 projects of INR 15,000 crores approximately under execution. As on date, one DBFOT project spreading across Rajasthan, UP, MP of INR 3,700 crores approximately is awaiting appointed date. As on date, we have bids of INR 7,300 crores approximately, which are yet to be opened. It constitutes of 2 highway, 2 railway and 1 power transmission and distribution project. Moving on sector highlights and infrastructure development of India. For the past few years, the bid awarding has a bit slow. However, based on recent announcements, we expect that in near term, the pace of bids will be enhanced. For road sector, NHAI plan to open a bid of INR 340,000 crores in current financial year. The combined length of these upcoming projects is estimated at 6,300 kilometers. NHAI has also leased its first-ever asset monetization strategy for the road sector. The strategy covers the period from 2025 to 2030 and focus on mobilizing capital through toll operate, transfer, infrastructure investment trust and securitization of models. The strategy is aligned with India's second national monetization pipeline, which target INR 10 trillion or USD 117 billion over 5 years from monetization infrastructure assets across sector. The road sector is expected to contribute INR 3.5 trillion or USD 41 billion of this total. In railway and metro, also, we see a strong pipeline of INR 96,000 crores approximately. Recently, the Cabinet Committee on Economic Affairs has approved 4 major railway projects of INR 11,169 crores approximately. And power transmission sector is also expected to attract a significant amount of investment. We see a pipeline of INR 54,000 crores approximately. For hydro and tunnels, the government is drawing a plan to build a tunnel project worth INR 2.5 lakh crores to INR 3 lakh crores over the next 10 years as part of country's infrastructure development. In the current financial year, we see the pipeline of INR 40,000 crores approximately. We will continue our strategy of diversifying and balancing our portfolio across various markets and sectors to achieve strong order book and growth in the current financial year. Our strong team and focus on our project delivery will continue to drive our success. That's all from my side. Over to Ankitji for update financial position of the company. Thank you.

Thank you, sir. I would be presenting now the key highlights of Q1 financial performance. The company's stand-alone revenue from operations was INR 1,826 crores approximately in the quarter ended June 2025, which has decreased by 3.7% year-over-year compared to INR 1,896 crores approximately in the quarter ended June 2024. This decrease was primarily on account of new projects, the execution of which started in Q1 of financial year '26. The company's consolidated revenue from operations was INR 1,988 crores approximately in the quarter ended June 2025, which has decreased by 2% approximately year-over-year compared to INR 2,030 crores in quarter ended June 2024. The stand-alone EBITDA margin stood at 12.65% in the quarter ended June '25. It was 13% in quarter ended June '24. The EBITDA margin at group level has increased to 20% in quarter ended June '25 from 18% in quarter ended June '24. Profit after tax at stand-alone level increased to INR 1,216 crores approximately in quarter ended June '25 compared to INR 152 crores in quarter ended June '24. Profit after tax at consolidated level also increased to INR 244 crores approximately in the quarter ended June '25 as compared to INR 156 crores in the quarter ended June '24. The stand-alone net worth stood at INR 8,105 crores approximately at the end of June 2025. It was INR 7,888 crores at the end of fiscal '25. The net worth at consolidated level is INR 8,749 crores approximately at the end of June 2025, it was INR 8,503 crores at the end of fiscal 2025. The total stand-alone borrowings outstanding at the end of fiscal 2025 is INR 364 crores approximately with debt to equity of 0.04x. The total consolidated borrowing outstanding at the end of fiscal 2025 is INR 5,371 crores with debt to equity of 0.61x. During the quarter, the company has made additions to the fixed assets amounting to INR 33.3 crores approximately. The net block of property, plant and equipment, including CWIP and intangibles is INR 1,174 crores at the end of current quarter. The investments in our subsidiary companies in the form of loans and equity is INR 2,400 crores, including interest at the end of June 2025. The balance promoter contribution required to be made for the operational HAM or BoT projects is INR 2,637 crores approximately, of which we are expecting a contribution of INR 800 crores in the fiscal year 2026. The working capital in days at the end of June 2025 is 121 days as compared to 117 days at the end of fiscal 2025. This increase was primarily on account of increase in inventory days for the power transmission distribution and roadways projects. The trade receivables at the stand-alone basis are INR 1,745.6 crores, including INR 1,583 crores HAM debtors at the end of June 2025. The trade receivables at the consolidated level are INR 215 crores at the end of fiscal 2025. The unbilled revenue at the stand-alone basis is INR 842 crores at the end of June 2025, and the unbilled revenue at the consolidated level is INR 314 crores at the end of fiscal 2025. The inventory levels are at INR 606 crores at the end of June 2025 compared to INR 538 crores at the end of fiscal 2025. With this, I sincerely thank to all our stakeholders, including employees, business partners, vendors, bankers, auditors, investors, those who have supported the company throughout. And on behalf of GR Infraprojects Limited, I thank everybody for attending this earnings call. Thank you. I hand over now to Mr. Parikshit to take...

Anshi, can we -- can you start the Q&A now?

[Operator Instructions] The first question is from the line of [ Abhinav ] from ICICI Securities Limited.

My first question is the recent changes to the HAM bidding criteria and NHAI's target of about INR 3.4 trillion bidding in FY '26. What is your take on it? I mean will the competition reduce? What will be your target on the order inflow front?

[Foreign Language].

Understood. Sir, and this ambitious target of INR 3.4 trillion. What is your take on it? I mean, will this completely bid bill out? Or will it be -- will it see some lower numbers than INR 3.4 trillion?

[Foreign Language].

Understood. Sir, the second question is on order inflow for the quarter. As per the calculation, it is coming out to be about INR 2,000 crores. We understand that L1 to LoA will be worth about INR 1,000 crores. What are the balance INR 1,000-odd crores?

Yes. So we have one railway projects of INR 222 crores approximately. And then we have the O&M contracts, which we were not showing separately earlier, but now we have added those of approximately INR 500 crores, and there are some change of scope items of approximately INR 30 crores.

[Operator Instructions] The next question is from the line of Mohit Kumar from ICICI Securities Limited.

Sir, what is the progress on Agra Gwalior DBFOT project? When do you expect the project to be handed over to us, especially on the -- if you can touch on the land acquisition part, what is the progress?

[Foreign Language].

So expect the next month or by the end of [Foreign Language], right, sir? [Foreign Language]?

[Foreign Language] so land acquisition almost completed. It is more than 98% or 99% land acquisition over the year, right? And we are expecting financial closure will be getting in the current month and probably we'll be able to start execution on this project maybe in the month of November or December, right? On day one -- I mean for current year, the progress is not that much high. But yes, we'll be starting execution on those projects, the executing -- execution on this project in the current year itself.

How do you think about your revenue now for F '26? Is it possible to get 15% growth or [Foreign Language]?

[Foreign Language] Monsoon started at the end of May itself, right? [Foreign Language] but otherwise, because we have been degrowing for last 2 years, right? [Foreign Language] we will be having -- this year, we'll be having growth of 10% at least or maybe 15%. [Foreign Language]. And now most of the orders, right, that all are under execution. I mean we have received the appointed date even latest -- last May, in the month of June or so or July, the last HAM project, we have received the appointed date. So all the projects are now under operations, right? They all are under construction. So it gives us some confidence that we'll be getting more than 10% kind of growth for the [ current year ].

My last question on this, sir, order [Foreign Language], how is it looking like? And do we have a target in mind [Foreign Language]?

So current year, [Foreign Language] order intake from transmission is in the range of INR 3,000 crore to INR 4,000 crore. And given the pipeline, we are hopeful that we'll be able to get this kind of...

The next question is from the line of Balasubramanian from Arihant Capital Markets Limited.

So my first question, we transferred 9 HAM assets to Indus Infra Trust. What is the strategy for future monetizations? Are there any contingent liabilities from indemnities project to the InvIT? This is my first question, sir.

So last question, which I couldn't get is basically if there is any contingent liability while we are transferring, right, those assets to InvIT. That was your last question. But before that, you also asked some different question, right, which I didn't get exactly. Now with respect to the contingent liability, contingent liability is what we have seen in the past, sometimes because of change of scope, because the project is not complete on even if we are getting COD. And on a later date, let's say, NHAI is coming up with a solution that, okay, they would be descoping, then there may be chances that project value, which we have estimated, right, while transferring that project to InvIT, may get revised because change of scope order would be finalized only at that point of time. So to that extent, that project value or the project value may be revised and my compensation accordingly will be get revision, maybe on higher side or maybe on lower side. That depends on case-to-case basis, it depends on the project which we are transferring, right? And sometimes there is a change with respect to that escalation or indices or something like this. To that extent, yes, of course, we are having that contingent liability carrying forward. But otherwise, there is no contingent liability basically while we are transferring any asset.

So on the first part, we transferred 9 HAM assets to Indus Infra Trust. So what is the strategy for future monetizations?

See, our strategy is to transfer to trust only as and when the project will be completed, ultimately because we don't want to be or we don't want to hold generally. That's not our, I would say, role to hold those assets for a longer period. That's how -- and that's why, I mean, we started with this idea of creating [indiscernible] the idea would be transferring those assets to trust only.

Okay. Sir, on the industry side, some industry regulatory side, the new performance security rules for aggressive bids may impact margins. So how we are adjusting our bidding strategies?

With respect to highway, you're saying?

Yes, sir.

See, highway, I mean, there is huge competition so far, which we have seen in the past. And hence, we are not able to get much project except in last 2, 2.5 years, we have got 1 BoT project. Otherwise, we are not able to get any project. And we are going by our own studies that we'll not be bidding to that low. I mean we will not be unless until we'll be making it net plus. I mean we are not making any -- I mean we don't want to lose basically while taking any highway projects, right? So that is our strategy, one piece. And second, what we believe is that they have come up with a good amount of projects, right, so far, which they have created or DPR is being prepared by them or land is being acquired by them. And now they have come up with -- so they have tightened that qualification criteria as well, both on technical terms as well as on the financial terms. So going forward, what we believe is that maybe in the next couple of months that competition would be coming down, and we'll be able to get a decent share of those projects, which would be bidded in the current year on decent margin. I won't say that there would be good margin, high margin, but yes, of course, we'll be able to maintain our margin while getting those projects.

Okay, sir. Sir, on the BharatNet-OFC project side and I think margins are around more than 10%. I think how many circles are yet to be awarded? And how can we look at in these segments in terms of business opportunity?

I think out of 16 projects they have bidded, they have awarded 13 projects, 3 more projects are yet to be -- or they have come up with revised bidding, right? And there also we will be participating. But what I believe is once we are starting execution on the project on this BharatNet, we'll be taking or we'll be exploring more business opportunity in this sector as well. So idea is to get some comfort on this particular sector, and we'll be getting more comfort, we'll be doing more projects on -- and the yearly target, I would say, would be in the range of at least to start with INR 1,000 crores to INR 1,500 crores.

[Operator Instructions] The next question in line is from Shailly Jain from Dolat Capital.

Sir, how much in the dividend are we expected to receive in FY '26?

Ma'am, you are audible. Give me one minute. I'm checking if the management is online. Ladies and gentlemen, the line for the management has disconnected, but we are working on getting them back. Please stay hold, please. We have the management online reconnected. Ms. Shailly, you could go ahead with your question, please.

I was asking how much in the dividend are we expected to receive for FY '26? And how much did we get for Q1?

Your voice is not that clear. So come again with your question. Shailly?

Is this better, sir?

Yes.

Yes. I was asking how much in the dividend are we expected to receive for FY '26?

For InvIT dividend, what...

Yes, yes.

InvIT, they are targeting almost 12% kind of return on a yearly basis, which is comprised of dividend and interest, right? So depending on the balance sheet of the SPVs, those amount -- those surplus would be either distributed through dividend or interest. So what we have been given guidance is that almost 12%, 12.5% would be the kind of. And that amount comes to in the range of INR 230 crores, INR 240 crores, right? It would be INR 40-odd crores we'll be getting in the form of interest.

And for Q1, sir?

Q1, we have received almost INR 40 crore.

Okay. INR 40 crores. And sir, what would be the retention money and consolidated number for Q1.

Retention is -- yes, INR 5 crores approximately retention is. And total consol debtor, you asking consol debtor?

Yes, sir.

I think it is in the range of INR 350-odd crore.

Consolidated debtor is approximately INR 214 crores for the quarter end.

Okay, INR 214 crores. And sir, for our equity requirement, what would be the -- sorry.

Yes, yes, please go ahead.

Yes, I was asking for our equity requirement, how much are we going to invest in the next 9 months and FY '27?

So as on date, our outstanding equity commitment is around INR 2,700 crores, INR 2,600 crores, right? And current year, we have almost invested so far INR 300 crores. We are expecting another INR 600 crores, INR 700 crores, INR 800 crores in the current year and the balance in the next 2 years. So again, in the range of INR 1,000-odd crores on a yearly basis.

Understood, sir. And how are we looking at margins for '26 and '27?

'26, we have already mentioned that it would be in the range of 12%, 13%. And for '27, I don't think that there would be any extraordinary shift in the margin metrics. If we are able to get good amount of projects, certainly, we can expect. And if we are able to get good growth also more than 20%, then certainly our margin would be improved. But otherwise, more or less in the range of 12% to 13% or 15%. That would be the general range.

The next question is from the line of Abhinav from ICICI Securities Limited.

Sir, as you just mentioned that if you were looking for growth more than 20%, then the margins will also improve. So just on the order inflow front, given the good pipeline in roads as well as now transmission as well, what is the order inflow growth we can see for '26 as well as '27 -- FY '27?

See, current year, we have targeted for order inflow of around INR 22,000 crores, right? And of course, I mean, depending on if we'll be able to get those kind of orders, which we believe because of the pipeline, which we can see...

Sir, INR 22,000 crores will be order book, right?

Order intake for the current year, right? So this is the current year target, order intake target. And next year, it would be in the range of INR 30,000 crores, I mean, depending on the government plan and all that, right? And -- so for FY '27, yes, we'll be able to get -- I mean, if things go as per our wish, then we'll be back on the track of having 20% plus kind of growth in terms of top line.

Understood. Sir, given this, I mean, INR 22,000 crores and INR 30,000 crores of order inflow target, then I mean the revenue should easily cross 15% estimate, right, given the execution remains same as it has been historically?

So it may not be on '27 basis, but '28, I mean, because we are on the -- in the range of INR 7,000 crores for the current year, right, INR 7,000 crores, INR 8,000 crores. And then generally, if we are getting more BoT projects, then those projects are getting started coming to execution only after the gap of 1 year, right, almost 10 to 12. So maybe '28, this, of course, will be with this kind of top line, you can see.

So for '27, you'll see again, 10% to 15% of growth rates, revenues?

For '27 years, yes, of course, we can be more than 15%. Yes, 20% -- 15% to 20%.

Okay. Sir, last question is on the underconstruction projects. Are we facing any challenges in execution from land availability perspective? Historically, we've seen that some of our projects have got extension of time and...

Yes. So whatever projects which are under execution because land is not 100%, I would say. So what right now we are facing in terms of challenges in execution is that presently, it is monsoon, right? There is a huge rains, which is we can witness across the country. And then maybe what we believe is that existing process, of course, there are challenges in terms of the land. So far, 100% land, we haven't got that done. But because of -- and that's how we are also interpreting that government so far, we haven't come with the various projects, reason being there, they are collecting the land piece at least and get that forest clearances on hand beforehand, before bidding and all that. So going forward, whatever project we'll be getting, maybe they won't be -- will be finding any land sort of issue. But yes, of course, [Foreign Language], there is -- intermittently, these issues are there, right, with respect to land acquisition, land availability and all that, right? It again depends on case-to-case basis, not in each and every project. As we mentioned in Agra Gwalior, there is almost more than 98% land is already being acquired, right? And that project was live for last 2 years. So that's how -- I mean, there is no challenge in terms of land acquisition for those projects.