Bondada Engineering Ltd Q4 FY2026 Concall Summary

Key Takeaways

• FY26 revenue nearly doubled to ₹2,843 crores, driven by solar EPC, telecom, and new BESS orders; management guides 60–70% revenue growth for FY27.
• Order book stands at ₹7,147 crores, with an additional ₹9,000 crores in the pipeline from a 2 GW IPP project in Andhra Pradesh, not yet included in the reported backlog.
• Q4 margin dipped on one-off material cost spikes, but management says the ₹7,200 crore order book as of 31 March 2026 all yields good margins and expects EBITDA to stay flat or improve 20–30 bps in FY27.
• The company is diversifying aggressively into BESS, data centres, defence, and products, aiming to shift revenue mix from 90% EPC toward 70% EPC / 30% products over time.
• What to watch next quarter: Whether the ₹2,850 crores of L1 orders convert into booked orders, the pace of defence M&A closure, and whether Q1 FY27 margins hold as guided after the Q4 dip.

Revenue Growth & Order Book

• FY26 performance: Revenue grew from ₹1,571 crores in FY25 to ₹2,843 crores in FY26, a three-year average CAGR of 90–95% and a 14-year CAGR of 53%.
• Order book composition: Of the ₹7,147 crores total, renewable energy accounts for ₹4,536 crores (~65%), BESS for ₹1,463 crores, with the remainder in Indian Railways, products, and defence.
• Conversion timeline: The ₹7,150 crore order book is expected to be delivered in the next 18 to 20 months.
• L1 pipeline: ₹2,850 crores of L1 orders are expected to be received in the first quarter of FY27.
• Adani relationship: The Adani project is ahead of timelines with ~20% executed and ₹70–80 crores billed; follow-up orders are under discussion and expected to flow continuously for the next 3–4 years.
• FY27 guidance: Management expects 60–70% revenue growth and 60–70% absolute net profit growth over FY26, from a base of ₹211 crores net profit.

Dr. Raghavendra Rao Bondada: "maybe anything around 60% to 70% of revenue growth will be there even coming financial year"

Margin Dynamics

• Q4 margin dip: Caused by two factors: billing on some low-margin projects and a spike in material costs, particularly steel and cable prices which rose 17–18% due to geopolitical disruptions causing staggered, abnormally high-cost deliveries.
• Annual margin improvement: Despite the Q4 dip, overall net profit margin improved ~30 bps year-on-year from 7.2% to 7.5%.
• FY27 margin outlook: Management expects EBITDA margins to remain the same or improve by 20–30 bps, citing the current order book's healthy margin profile; Q1 FY27 materials were procured within budgets so no dip is expected.
• Long-term margin target: The company expects to sustain 11–12% EBITDA and 7% PAT going forward "very comfortably."
• Contract structure: Some contracts have pass-through clauses for raw material costs, while others are fixed-price.

Satyanarayana Baratam: "EBITDA margins for this year will remain same or maybe we will have a little improved margins of by about 20, 30 basis points yes. Because whatever order book we have as of 31 March, 2026, the INR 7,200 crores, all projects are yielding good margins. So we don't see this kind of fourth quarter dip in coming this year."

BESS & Renewable Energy

• BESS order wins: Secured 850 MWh of BESS orders from Tamil Nadu and Andhra Pradesh, structured as annuity-based contracts for 12 years.
• Execution timeline: Tamil Nadu 400 MWh project to be completed within one year; AP 450 MWh project to be completed in the next 18 months (first half of FY28).
• Funding status: Tamil Nadu project has achieved financial closure with Canara Bank; AP project financial closure is pending but banks are lined up; both projects have VGF support from MNRE.
• Revenue recognition: Meaningful EPC revenue from BESS expected in FY27; annuity revenue from the IPP portion starts from Q1 FY28.
• Tender discipline: Management is intentionally staying away from BESS tenders where pricing falls below viability thresholds; participated in NTPC tenders but were not L1 and expressed no regret, calling those projects unviable.
• Solar overcapacity rebuttal: Management disputes the perception of solar overcapacity, arguing the real constraint is grid stability and storage, not excess generation capacity; government is addressing this through BESS projects and transmission upgrades, and renewable capacity build-out will continue for the next decade.
• EPC commissioning target: Targeting 1.5 GW of EPC commissioning in FY27, with a 7.8 GW portfolio to be commissioned over the next 2–2.5 years.

Rear Admiral R Sreenivas: "And as of today in the best less you know space in the country the RFPs issued by us are some kind of an industry benchmark. The people do follow the RFPs issued by us and then the conditions for this life cycle sustenance and then the warranty model that we have put are being considered as one of the best by the industry."

New Verticals: Data Centres & Defence

• Data centre entry: Signed an MOU with UK-based Bryanston Resources to identify hyperscaler operators; Bondada will set up data centre infrastructure including connectivity, power, fibre, and shell; two facilities planned in Hyderabad and Vizag.
• Data centre economics: Starting with 2–3 MW facilities, each megawatt representing ₹35–40 crores in scope of work; the model involves creating ready-to-build parcels or shells and handing them over to operators within 6–8 months, with no long-term capex commitment.
• Data centre revenue contribution: Expected to contribute 7–8% of total revenue in FY27, at an EBITDA margin of 14–15%.
• Defence entry: Entering defence and aerospace through niche system integration and subsystem manufacturing; bagged a first critical component order from BEL for a missile, with prototypes supplied and execution within three months; on successful trials, regular mass production orders are expected.
• Defence inorganic strategy: In advanced talks to acquire or merge with three companies that hold substantial intellectual capital; due diligence underway, with a deal described as "another weeks away."
• Defence revenue timeline: Will contribute from FY27, with meaningful contribution growing over the next three to four years; by 2030, the company may roll out products for direct use by defence forces as well as subsystems for defence PSUs.
• Product mix ambition: Management aims to shift the revenue mix from 90% EPC / 10% products toward 70% EPC / 30% products, with defence and data centres as key drivers.

Rear Admiral R Sreenivas: "One significant difference that we already shown is in the very first year of our coming into the defence area we bagged our first critical component order which we are going to execute in the next two to three months. And that is a that's a very significant difference as compared to the other companies who took some time to actually mark their first revenues."

Balance Sheet & Working Capital

• Receivables position: Receivables at 27–28% of revenue, which management characterises as better than the 30–35% industry norm for EPC companies.
• Cash flow turnaround: The company became cash-positive from operations as of 31 March 2026, driven by a major Q4 collections push that brought in over ₹1,000 crores in total receivables, including ₹457 crores in March alone.
• Current liabilities increase: Jumped from ₹171 crores to ₹501 crores due to two components: customer advances of ₹150 crores and use of the TReDS facility to fund MSME supplier payments at a cheaper cost of finance with a 90-day vintage.
• Working capital cycle: Managing 85–90 days with PSU clients (NLC, NTPC, Singareni Collieries, MAHAGENCO) and expects to maintain the same cycle; major Q4 collections came from NLC, NTPC, and Adani.
• Cash surplus: The company is cash-positive with a ₹100 crore surplus after netting debt.
• Cash flow outlook: Management expects to sustain the same level of cash from operations in upcoming quarters.

Strategic Initiatives & Vision 2030

• Integrated manufacturing facility: 27 acres identified near Hyderabad for a facility integrating MMS structures, transmission towers, and BESS with vanadium technology; construction starts Q2 FY27, commissioning in one year; management states the ₹120 crore investment can generate ₹1,500–1,800 crores of annual revenue, though this is not required for FY27 numbers and is incremental from FY28 onward.
• IPP project in Andhra Pradesh: A 2 GW IPP project through SPV GreenBond RE Park Private Limited, with a confirmed pipeline of ₹9,000 crores shown separately from the ₹7,100 crore order book; installation phased over three to four years starting with 250 MW, with revenue generation from 2031 onward.
• Equity requirement: ₹250 crores of equity infusion needed for the first 250 MW phase, with multiple avenues available.
• Vision 2030: Target of 25 GW renewable energy capacity by 2030 (16 GW solar, 9 GW BESS), with a commensurate $1 billion revenue target.
• Revenue mix by FY28/FY29: EPC at 50–60%, IPP contribution around 20–25%, products at 15–20%.
• Main board migration: Planned migration to BSE and NSE main board in FY27 to enhance market presence.

Guidance & Commitments

Key Metrics