IRB Infrastructure Developers Limited (IRB.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good evening. Welcome to the IRB Infrastructure Developers Conference Call for discussing the financial results for quarter and half year ended 30 September 2025, along with the recent developments. We have with us on the call today Mr. Virendra Mhaiskar, Mr. S.S. Rana, Mr. Anil Yadav, Mr. Mehul Patel, Ms. Poonam Nishal and Mr. Tushar Kawedia. [Operator Instructions] Please note that the duration of the call would be 45 minutes and any query left unanswered after the call can be subsequently mailed to the management for adequate response and resolution. Please note that this conference is being recorded. I now request Mr. Yadav to give you an overview of significant developments during the quarter. Thank you, and over to you, sir.

Thank you. Good evening, everyone. I extend warm welcome to all investors and analysts joining us for our earnings call to discuss the results for Q2 of financial year 2025-'26. I trust you have reviewed the detailed financials and accompanying presentation. Allow me briefly highlight the key development during the quarter. Our Private InvIT reported per day toll collection of INR 11.23 crores for the quarter ended September 2025 compared to INR 9.94 crores per day in the same quarter last year, a growth of 13%, driven by the healthy traffic momentum and tariff revision. On a combined basis, that is Private InvIT and IRB portfolio put together, the per day toll collection has reached to INR 18.13 crores, up from INR 16.34 crores last year, reflecting a growth of 11% year-on-year basis supported by both traffic growth and tariff revision. During the quarter, IRB Infrastructure Fund, that is the Public InvIT has successfully completed the acquisition of the 3 revenue-generating highway assets with a combined enterprise value of INR 8,436 crores. The acquisition was backed by robust participation from marquee global and domestic investors, infusing INR 4,250 crores into the Public InvIT. This transaction marks a significant milestone for IRB Group, strengthening our InvIT platform and unlocking a capital of INR 4,905 crores for IRB. The proceeds will enable us to pursue the upcoming opportunity worth over INR 15,000 crores, aligning with our vision to achieve a development portfolio of INR 1,40,000 crores over the period of 3 years. The acquired assets have also enhanced our O&M order book meaningfully. The strong investor participation underscores the trust and credibility of IRB Group built over past 3 decades and reaffirm strength of our InvIT framework as a transparent, scalable and reliable platform for long-term infrastructure growth and investment. This is a win-win transaction for both InvIT to expand their portfolio, enhance the distribution and continue creating sustainable long-term value for their stakeholders. We are also pleased to share that VM7 Expressway Private Limited has achieved the provisional COD for its 8-lane Gandeva Ena Expressway project in the Gujarat, a key switch between Delhi to Mumbai Greenfield Expressway implemented under HAM model. With this, the project becomes eligible for biannual annuity for next 15 years, generating approximately INR 170 crores to INR 180 crores annually as a stable annuity revenue. The project is also executed with a strong focus of sustainability, including the water conservation and reuse of Sujalam Sufalam Initiative, making it water positive project. The company has declared second interim dividend, resulting in payout of INR 42 crores to its shareholders in line with the dividend policy. Private InvIT has declared a distribution of approximately INR 54 crores, contributing proportionately to IRB's cash flow based on the 51% holding. Public InvIT has declared a distribution of INR 192 crores in Q2 of FY '26. Based on its 17% holding, IRB is expected to receive around INR 32 crores in the cash flow. The order book now stands around INR 32,000 crores, including the EPC order book of roughly INR 1,500 crores. We also continue to evaluate the upcoming opportunity for the new BOT and TOT projects with a clear bidding pipeline, which is available for the next 30 days. There are more than 6 or 7 BOT assets, which is -- which will get bidded out based on the time line provided by the authorities. Those will get bidded out in the next 30 days and around 5 to 6 TOT projects also will be bidded out over the period of next 1 month. Now I will request Tushar to cover the financial highlights for Q2 FY '26. Over to you, Tushar.

Thank you, sir. Now I'll take you through the financial analysis for Q2 FY '26 versus Q2 FY '25. The total consolidated income for Q2 FY '26 has increased to INR 1,800 crores from INR 1,752 crores, registering a growth of 3%. The income from InvIT and related segment for Q2 FY '26 has increased to INR 303 crores from INR 129 crores, registering a growth of 135%. The income from BOT segment for Q2 FY '26 have increased to INR 626 crores from INR 581 crores, registering a growth of 8%. Income from Construction segment for Q2 FY '26 has decreased to INR 820 crores from INR 1,005 crores, down by 18%. The other income for Q2 FY '26 have increased to INR 49 crores from INR 37 crores, increased by 34%. EBITDA increased to INR 974 crores from INR 933 crores, an increase of 4%. The interest cost increased to INR 451 crores from INR 434 crores, an increase of 4%. Depreciation cost increased to INR 262 crores in Q2 FY '26 from INR 231 crores, an increase of 13%. PBT has decreased to INR 261 crores from INR 267 crores, a decrease of 2%. PAT has increased to INR 141 crores from INR 100 crores post share of JV loss of INR 84 crores, an increase of 41% for the quarter. I would request now the moderator to open the session for question and answer.

[Operator Instructions] The first question is from the line of Alok Deora from Motilal Oswal.

Just had a couple of questions. One is on the awarding. I believe we have not received any new orders in this quarter and even YTD NHAI awarding has been very weak at around 500 kilometers. So what is the sense which we are getting now for the remaining 4 months of this -- 4 to 5 months of this financial year? Because would it be another year where awarding is weak? Or could there be some revival here?

I think, Alok, historically also the project awarding from the authority was fag ended towards the fag end of the year. And we have started seeing some traction in terms of award. And in terms of the bid pipeline, if I will talk about, there is almost 6 TOT projects from TOT 18 to TOT 22 that is up for bidding in next 1 month. And total length is roughly INR 680 crores. And there are around 8 BOT projects also include 6 from the NHAI and a couple from the MSRDC. And those are worth of INR 30,000 crores. Again, these are also up for the bidding over the period of 1 month. So I think there is a healthy pipeline, which is visible for next 1 month. We believe that there will be award activity will start and we have seen some signs. So I think we believe that there will be award activity will be starting as we are moving towards the fag end of the year.

Sure. So sir, based on the current run rate, what kind of construction revenue we are expecting because the growth has been primarily driven by the toll revenues, right? So the core construction, what can be the growth outlook for this year and even the next year, considering the current order backlog and assuming the orders -- we win some orders in the remaining part of this year?

So Alok, for the current year, what we are estimating with the order book in hand, the revenue should be close to INR 4,300 crores to INR 4,500 crores for the year-end FY '26. And on the O&M front, so this includes both EPC and O&M. From a total order book, the order book is INR 32,000 crores. The executable order book in next 1, 1.5 years is close to INR 4,000 crores.

Alok, just to add to what Tushar has said, gradually, we are moving towards the O&M order book execution. If you look at the O&M order book for next 10 to 12 years, it's around INR 30,000 crores. Since we have a concession of 20 years, the weighted average life, whether you take it public InvIT, private InvIT, all are ranging towards 20 years. So then the O&M order book for next 20 years will be ranging from INR 60,000 crores to INR 70,000 crores. And even if -- because there will be a gradually increasing O&M. And that will be -- going forward, there will be healthy revenue, which will be coming on account of the O&M execution. Earlier from 8%, 10% kind of O&M execution, we have moved to around 25%, 30% kind of order execution coming from the O&M. And gradually, we'll be moving to almost 50% revenue will be coming from the O&M. And that will be steady state revenue, which will be continuing. And the moment we move to the 100% O&M, then the visibility for the O&M revenue will have around 15 to 20 years and the margin is quite stable, then definitely, in terms of the overall margin in terms of the spec, that will be much better as compared to the EPC revenue. Having said that, whenever -- as I have already discussed, there is INR 30,000 crores worth of BOT to be bidded out in next 1 month. Whenever the opportunity will be there on the basis of viability and other things, we will be evaluating those opportunities. But gradually, I think EPC will be more shifting for doing the O&M work than the pure-play EPC where one has to struggle for EPC order book for every 2 years.

Got it. Just last question. Now after this sale of assets from private to public InvIT, there is obviously release of capital. So how we are positioning InvIT and how we used to best -- how we are looking to best use it for our future bidding? Are we also looking at other sectors or any -- because this equity release is definitely a much required thing. And so how we look to utilize that? That would be my last question.

I think, Alok, as you are discussing, almost there are 6 TOT, which is lined up to be bidded out over the period of 1 month. And if you look at the overall size, maybe around INR 20,000 crores to INR 25,000 crores will be the size of those TOT. And as we have already communicated that the INR 5,000 crores proceeds will be utilized for the upcoming opportunity and which can cater to around INR 14,000 crores to INR 15,000 crores kind of additional projects. So considering the pipeline available, I think there is enough in the sector. We are not looking to move out of the sector. And probably considering the pipeline, we should be able to back the project.

[Operator Instructions] The next question is from the line of Aditya Sahu from HDFC Securities.

Yes, sure. So as you mentioned in the pipeline, so INR 30,000 crores would be the BOT bid pipeline that we have and INR 25,000 crores would be the TOT bid pipeline. So overall INR 55,000 crores would be the overall bid pipeline that we have right now?

Yes, Aditya. So that is a bid which is lined up over the period of next 1 month.

Understood, sir. Understood. And since you have mentioned that you are targeting a revenue of about INR 4,500 crores from EPC and O&M. Any sense if you can provide on what sort of margin levels are you looking at?

So margin levels will be in the range of 20% to 23% for O&M order book.

Okay. 20% to 23% for O&M book?

Yes.

Aditya, just to add what Tushar is highlighting. He is highlighting that there will be a steady state of O&M, which will be coming. Even if we are executing roughly INR 2,000 crores or INR 3,000 crores kind of order book, then roughly INR 700 crores, INR 750 crores will be the EBITDA margin considering the O&M order book itself over the period of -- as we will gradually move to 50% to 60% of the current execution in form of O&M.

The next question is from the line of Bhavik Shah from Invexa Capital.

Sir, my first question is when we look at the half yearly balance sheet, our net debt comes to INR 12,805 crores. But in the investor presentation, the number is different. Can you help us understand what is included and what is not, one? And second, sir, can you help us provide the breakup of the debt, how much is the private InvIT debt? And how much is the debt on the books for EPC projects? And how much is the debt on the books for BOT and HAM projects?

Yes. Tushar will provide the breakup of the debt of each segment. But broadly, I will touch upon. I think in terms of -- if you are looking at the financial, which we have given as a disclosure, so there the deferred premium also gets counted as a part of overall liabilities. So I think if you remove that deferred premium, which is in case of Ahmedabad Vadodara, the number which is appearing in the presentation and the number which is appearing in the financial will get tallied up. And in terms of if you need a debt breakup, we can provide that and anyway that is available in the financials. So primarily, we have a debt at Mumbai-Pune level, Ahmedabad Vadodara and 2 HAM, but then the debt is not that significant. And then the holdco debt. And when I will discuss about the private InvIT or public InvIT, private InvIT debt overall will be roughly INR 63,500 crores and debt will be close to INR 23,000 crores to INR 25,000 crores. So if you look at around 40% is the debt at private InvIT level. And public InvIT debt based on the September financial, it's around 25%, 28%. I think for IRB, Tushar will provide the breakup of the debt at various levels.

Yes. So if you see for SPV, the debt would be around INR 7,800 crores link the SPV of IRB, which is Mumbai-Pune, Ahmedabad-Vadodara and the other 3 HAM assets. So the debt is close to INR 78 billion. And for IRB and MRM, which is the executing arm, there we have a debt of close to INR 80 billion.

Understood sir. And sir, what is our debt given to private InvIT.