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

Ladies and gentlemen, good day, and welcome to the GR Infraprojects Projects Limited Q1 FY '27 Earnings Conference Call hosted by HDFC Securities Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. From the management, we have Mr. Ajendra Kumar Agarwal, Managing Director; Mr. Anand Rathi, Group CFO; and Mr. Ankit Maheshwari, Deputy CFO. I now hand the conference over to Mr. Parikshit Kandpal from HDFC Securities. Thank you, and over to you, sir.

Thank you, Anand. So I'll just hand over the call to the management without taking much time. So Ajendra will start the proceedings with a brief overview of the industry, followed by a financial presentation by Rathi and Ankit. Over to you, sir.

Good afternoon, ladies and gentlemen, and a warm welcome to the Q1 FY '27 Earnings Conference Call of GR Infraprojects Limited. Thank you for taking the time to join us today. I am joined on this call by Anand Rathi, Chief Financial Officer; and Ankit Maheshwari, Deputy CFO of the company. I will begin by sharing an overview of our financial and operational performance during the quarter, along with our perspective on infrastructure sector. Thereafter, Ankit will take you through the financial performance in detail, following which we will open the floor for questions. During Q1 FY '27, the company reported revenue from operations of approximately INR 2,423 crores, representing a growth of 32.71% compared to corresponding quarter of the previous financial year on a stand-alone basis. EBITDA margin stood at 11.01% against 12.1% in the corresponding period last year. During the year, the company maintained a debt equity ratio to 0.03, which is continued to remain among the best in the sector. As of 1st July 2026, our order book stands at approximately INR 25,300 crores, further [ aggregate ] [indiscernible] [ INR 32,000 crores ] are yet to be opened. During the quarter, PCOD [indiscernible] in Punjab [indiscernible] have been received on date of projects amounting to INR 7,250 crores are still awaited. I would like to reiterate that the company's growth strategy is not limited to the road sector alone. We continue to see growing opportunity across metro railway, power transmission, logistics and warehousing tunnel, battery energy storage system, telecom and oil and gas sectors. Considering that, we believe greater participation of private capital supported by improved long-term financing mechanism and clear concession structure shall support the expansion of infrastructure sector and create additional opportunity for experienced EPC players. While the [indiscernible] award may remain positive on the overall outlook for India. The country to [indiscernible] [ volume private participation ]. Let me now briefly touch upon the key sector develop. In transport sector, the transport sector continued to present a strong with an overall pipeline of around INR 3.5 lakh crores comprising approximately 78% of highway, 16% in railway and 6% in metro. The government is also working to revive private sector participation in highway through a new model combining of BoT and HAM. The proposed framework would provide 10% to 25% upfront government support for projects requiring higher levels of visibility gas funding while allowing concession to retain toll revenue over a fixed 20-year concession period. The revamp BoT toll framework is also expected to bring over 10,000 kilometers of projects into the private bidding pipeline. The newly introduced urban decongestion policy is expected to strengthen center state coordination with greater state participation in planning and financing ring roads, bypass and other urban connectivity projects. The railway sector also continued to move towards corridor-based capacity creation, freight and technology-led [indiscernible]. During the quarter, the government approved multiple multi-tracking projects with an aggregate investment of approximately INR 48,000 crores, while continued investment in safety, signaling and communication infrastructure continue to strengthen network capability and reliability. In power transmission, the power sector is entering a period of structure reform with the government preparing the first major overhaul of the national electricity policy. The proposed policy is expected to address the issue around transmission and distribution network access, traffic rationalization and subsidies with potential implications for investment and private participation across the power sector. As renewable energy generation expands, the sector's next phase of growth is expected to increasingly focus on developing high-capacity transmission network to evacuate power from renewable grid regions. The sector is emerging as a significant infrastructure opportunity with industry estimates indicating transmission CapEx of around INR 5 lakh to INR 6 lakh crores between financial year '27 and '32. Lead by strong [indiscernible] pipeline [indiscernible] INR 1 lakh crores approximately over the next 5 years, the government also strengthen policy support for energy storage with proposed INR 15,000 crores viability gap funding scheme for 112 gigawatt of storage capacity, including 60 gigawatt of pump storage. In oil and gas, the government has approved INR 54,000 crores incentive package to accelerate deepwater exploration and attract foreign investment including support of up to 50% of exploring [indiscernible] cost, the government is also stepping up effort to expand domestic oil and gas exploration with 46 new exploration blocks under open licensing policy covering over 2.6 lakh square kilometer offered under the [ OALP ] rounds. In logistics and warehousing, the logistics and warehousing sector is also a significant long-term opportunity with the industry estimate indicating that India could require around 216 multimodal logistic parks by 2047 to support the growth of freight movement and improve supply chain efficiency. The government is also working to strengthen the model concession agreement framework for multimodal logistics park with objective of improving project viability and facilitating greater private sector participation. Warehousing sector is witnessing strong investment momentum with institutional investment in Indian warehousing rising 53% year-on-year to around INR 500 crores. The warehousing sector is also expanding beyond traditional metropolitan market with many Tier 2 cities emerging as new warehousing hubs, supported by improving connectivity, growing con and industrial activity. I would like to thank our clients, vendors, partners, employees and shareholders for their continued trust and support. With that, I now request Ankit to take you through the financial performance in detail. Thank you.

Thank you, sir, and good afternoon, everyone. I will start with the key highlights of quarter 1 performance. The stand-alone revenue from operation was INR 2,423 crores approximately in the quarter ended June '26, which has increased by 32.1% year-over-year compared to INR 1,826 crores in quarter ended June '25. The consolidated revenue from operations was INR 2,784 crores in quarter ended June '26, which has increased by 40% year-over-year compared to INR 1,988 crores in quarter ended June '25. The stand-alone EBITDA margin stood at 11.2% in quarter ended June '26 from 12.65% in quarter ended June '25. The decrease was primarily account of higher construction and material costs. The EBITDA margin at group level has decreased to 16.83% in quarter ended June '26 from 20% in quarter ended June '25. Profit after tax at stand-alone level decreased to INR 203 crores in quarter ended June '26 as compared to INR 216 crores in quarter ended June '25. Profit after tax at consolidated level increased INR 358 crores in quarter ended June '26 compared to INR 244 crores in quarter ended June '25. The PAT in the current quarter includes exceptional item of INR 46 crores related to gain on dilution of interest in associate from 43.5% to 31.58%. The stand-alone net worth stood at INR 9,074 crores at the end of June '26...

Sorry to interrupt, sir, I would request you to come a little closer to the microphone because your voice is fading away every now and then.

The stand-alone net worth stood at INR 9,074 crores at the end of June '26, it was INR 8,869 crores at the end of fiscal '26. The net worth in consolidated level is INR 9,750 crores at the end of June '26, it was INR 9,391 crores at the end of fiscal '26. A total standalone borrowings at the end of June '26 is INR 239 crores with equity if 0.03x. The total consolidated borrowings, outstanding at the end of June '26 is INR 5,286 crores with an equity of 0.55x. During the quarter, the company has made additions to the [indiscernible] businesses amounting to INR 22 crores, to the net block and equipment which is INR 1,019 crores at the end of second quarter June '26. Investment in the subsidiary companies in the form of loan and equity are INR 2,435 crores at the end of June and the balance equity contribution required to be made to the HAM and BoT projects is INR 3,346 crores. of which we are expecting contribution of approximately INR 900 crores to INR 901,000 crores in the fiscal '27. Working capital days at the end of June '26 is 140 days, 48 days as compared to 128 days at the end of fiscal '26, the increase is primarily on account of increase in [ better ] and inventory days. The trade receivables at the standalone basis at INR 2,655 crores including INR 1,784 crores returns at the end of June '26, and the trade receivables at the consolidated level at INR 1,091 crores at the end of '26. The unbilled revenue at the standalone basis is INR 938 crores at the end of June '26 and uneven at the consolidated level is INR 498 crores at the end of June '26. Inventories are at INR 863 crores at the June '26 compared to INR 739 crores at the end of fiscal '26. I sincerely like to thanks again to everyone, and on behalf of GR Infraprojects Limited. Thanks everybody.

[Operator Instructions] The first question comes from the line of Shravan Shah with Dolat Capital.

So a couple of questions. So sir, first broad in terms of the guidance. So previously, we were looking at revenue at a stand-alone level for FY '27 15-odd percent kind of a growth. Now we have already done a much better number in 32%, 33% in the Q1. So how one can look at the FY '27 revenue? And going forward, in terms of the FY '28 onwards, can we see this execution rate in [indiscernible] plus of a number?

So yes, I mean, quarter 1, we have been able to achieve 30% plus. But for the year, our guidance remains the same, around 15% to 20%. And next year, depending upon the order inflow, et cetera, we expect that, yes, we can reach closer to 20% of the growth.

Okay. And on the margin front, 10.5%, 11% we were looking at. So still given the commodity prices and that's why we are still maintaining the same? Or can we see 11% what we have done in the Q1, we can even maintain or maybe some improvement is also possible there?

If you see current scenario, 10% to 11% would be the range. But let's see how the macroeconomic factors evolve after some time. Marginally, things can improve, but we think that 10% to 11% would be the right range.

Yes. And now the main in terms of the inflow so how one can look at the inflow, which we were looking at INR 20,000 crores, INR 25,000-odd crores. So how much we are looking at, sir, has mentioned that close to INR 32,000 crores that we have submitted is yet to be open. If you can also split it in terms of the segment-wise what we are looking at and what we have bidded...

[Foreign Language]

[Foreign Language]

[Foreign Language] The only issue is the transmission side, those are the new sectors where we are also developing our team probably for example, oil and gas may be the government has come up with the incentive scheme, right? So [indiscernible] that particular sector. we can take INR 20,000 crores orders, right? So there is no issue in terms of transportation, road side, metro, whatsoever. So we are targeting both. I mean, for the current year, what we are targeting is because we are looking at each and every model of the road transport. So Ham, we are looking at EPC, we are looking at HAM, we are looking at BoT, [indiscernible] whatever. We are comfortable with each and every model. What we are targeting for the current year [indiscernible] around INR 14,000 crores of inflow which we are targeting in road sector. Depending on that competition, it may come, it may go up. I mean in terms of capacity. In terms of capabilities, we are not basically there is [indiscernible] up to INR 15,000, INR 18,000 but then depending on that comp sector is this is our guidance. This is our target. [indiscernible] 10%...

[Foreign Language]

[Foreign Language] So I think we are confident we'll be getting that in the month of October, November because those projects we have in March, again, that would be in the month of December. [Foreign Language]

[Operator Instructions] the next question comes from the line of Vaibhav Shah with JM Financial.

Sir, what would be our revenue from T&D vertical in the first quarter.

The T&D first quarter revenue was approximately INR 10 crores.

Okay. So growth was mainly driven by highways in the first quarter?

The three sectors, I would say, transport, which includes, of course, highways, second was PT&E [indiscernible] the previous financial year, it was INR 75 crores and this quarter is INR 110 crores and also from the oil and gas business unit. So three sectors were the major contributors.

And what was ON revenue this quarter?

ON revenue this quarter is INR 270 crores.

And our target for entire year...

The target is approximately INR 1000 plus crores.

Okay. Sir, secondly, on the order inflow guidance, so the total number will be maintained around INR 22,000 crores combined?

As Anand already explained, sector-wise, depending upon how bids happen, it could be plus/minus 10%.

Around INR 20,000 crores a month?

Correct.

The next question comes from the line of [ Aditya Khetan ] with First Asset Limited.

I wanted to know your views on the opportunity presented by the hydrogen rail program and which part of the entire value chain does the company expect to participate in? And like what meaningful growth driver can come in the medium term from this new project of the government?

Yes. I mean, though it's a good initiative, of course, by the government. But presently, from our strategy viewpoint, we are not exploring that particular sector.

So are you not actively involved in this project at all?

In hydrogen? No.

Okay. Do you have any more questions, Aditya?

No, sir. I just wanted to know if the company is like into the hydrogen rail program because somewhere had come across they are actively into the fueling stage. That's it.

The next question comes from the line of Veenit Pasad with Investec India.

Sir, just a couple of questions. The first one is we've had a very sharp raw material inflation, particularly related to crude in Q1 and in the last few months. How confident are you that gets compensated by the escalation clauses, which we have across our projects. And the same holds true for other raw material commodities as well?

See crude actually, particularly, I mean for it is not crude, [indiscernible] bitumen, right, and bitumen linked product, which is, I mean, petrocarbon from hydrocarbon pro diesel and all. So particularly for bitumen, government has come up with direct circular, which is actually -- so it is over and above the escalation clause which we are having in the contract because the price jump in bitumen is so -- I mean, it was so high, right, which could not be covered through escalation. And they came up with the direct circular. And they linked whatever bitumen, which we have been applying on the road construction activities during the quarter, we have been directly compensated by the government. Yes, of course, on diesel side that was not the case. So to that extent, we have -- our financials have been impacted, right, diesel and related to the diesel, I mean, because, for example, we are utilizing aggregate, right, which is being crushed by the crusher where, again, input is the diesel, right, or maybe electricity and all that, right? So to that extent, yes. So overall impact is there on the raw material side and because of the diesel or energy-related issues, energy-related price hike, price. But if we talk about specifically bitumen, which is the component, which is getting utilized into our project, that is very well compensated by the government, yes.

Understood. And how about, sir, for aluminum, steel, particularly in the power transmission sector?

Transmission sector in aluminum, copper, not much -- is not because of -- it is more kind of speculation, right, because of that war situation, the volatility was there, and it was very much -- I mean, the price variation was very high, right? But it is not bad -- I mean it is not -- maybe it's not because of the -- maybe supply chain could be one of the reasons, but it is more of speculation, probably what we believe is that in the next 3 to 6 months, that would be again stabilized. And we are -- see, of course, it is impacting our project margin, but it is not that -- I mean we have to -- that is getting spread over the period of 2 years of time, right? So whatever raw material which we are procuring for a power transmission project, which we are in next 1.5 years, it is getting spread over there. So maybe for current quarter or whatever raw material which we are purchasing, right, to that extent, my price would be higher, but it is not getting compensated, we are not getting any escalation at least into power transmission project. But over the next 2 years, maybe this would again be normalized and the price would -- I mean, impact would not be that high, right, which probably we'll see next -- I mean, the current 1 or 2 quarters.

Understood. Understood. And sir, one bookkeeping question. If I look at the other income this quarter, that was relatively on the lower side. Any particular reasons for the same?

Yes. So if you see the impact of other income is basically the interest and dividend, which we received from the trust. So this quarter, that payment was in the form of capital repayment. So that becomes the balance sheet item and not the P&L item. So overall, at the company level, yes, we have received INR 3.5 per unit versus INR 2.25 per unit in the last quarter -- previous year's quarter. And interest dividend income was lower. So that's why you see the difference.

[Operator Instructions] the next question comes from the line of Bhavin Modi with Anand Rathi Group.

Sir, how are you seeing the operation in the road sector? Like we have been in some setting opening open in the more and the actually 15 to 20 miles away there mean base that open. So how does the competition?

[Foreign Language]

Second, sir, how does the competition is it in metro railways? That also we are seeing the rotating for those fees and the competition is in [indiscernible].

[Foreign Language]

[Foreign Language]

Even railway, we will find that government is basically considering that HAM model in railway projects also, right? Dedicated freight they are talking about those projects would be awarded under HAM model. So the government is also considering more and more participation on private side rather than the EPC. So if come over and more capital is required, that also gives that push to basically the competition would be lesser going forward. [Foreign Language]

The next question comes from the line of Uttam Srimal with Axis Securities.

[Foreign Language]

[Foreign Language]

[Foreign Language]

For the current year, the CapEx guidance is of approximately INR 300 crores. And for the next year, it has remained INR 200 crores, INR 250 crores.

So if you can just give in absolute terms how much distribution we received from the [indiscernible] in the quarter, are you planning to transfer any other asset being meeting this year?

Specifically, I mean what you are saying is exactly the cash flow we have received [indiscernible] right? This is around, I would say, INR 70 crores INR 70 crores we have received in the second quarter. And the second question you asked is that -- yes. So we have -- I mean, so for current year also, we are targeting at least four assets would be transferred to the year.

Okay. And sir, what is the status of the [ BharatNet ] project?