# 1. Financial Performance ## A. Key Figures * **Total Income:** **₹1,249 Cr** Q2 FY26 (+18%) · **₹2,554 Cr** H1 FY26 (+24%) * **EBITDA:** **₹158 Cr** Q2 FY26 (+18%) · **₹340 Cr** H1 FY26 (+33%) * **PAT:** **₹78 Cr** Q2 FY26 (+12%) · **₹159 Cr** H1 FY26 (+21%) * **Net Debt:** **₹360 Cr** (as of 30 Sep '25) * ROCE: 4.58% H1 FY26 (from 4.73% FY '25) ## B. Revenue Growth * **Sustained Top-Line Momentum:** Revenue growth accelerated in H1 driven by strong project execution, with full-year guidance reaffirmed at **~18% YoY**. * **Other Income Expansion:** Non-operating income rose on higher margin money deposits, contributing to overall financial inflows. ## C. Profit Margins * **Margin Pressure Persists:** Despite robust revenue and EBITDA growth, EBITDA margin dipped in Q2 due to higher operating costs, while PAT margin compression reflects elevated finance, depreciation, and tax expenses. * **Segmental Divergence:** O&M segment delivers **15–16% EBITDA margins**, significantly outperforming construction’s **~10%**, highlighting strategic value of service-oriented businesses. * **ROE/ROCE Deterioration:** Return ratios declined due to profit drag and seasonal headwinds (e.g., rains), raising investor scrutiny on capital efficiency. ## D. Balance Sheet * **Working Capital Strain:** Net current asset days expanded to **151 days** due to delayed certifications in the Water division, weighing on liquidity. * **Debt Discipline Maintained:** Leverage remains controlled at **0.37x net debt/equity**, with no near-term equity plans unless new opportunities emerge. ## E. Cash Flow * **Cash Flow Recovery:** Operating cash outflow narrowed sharply to **₹63 Cr** (from ₹166 Cr outflow YoY), aided by receivables realization, signaling improved collections. --- # 2. Order Book & Inflows ## A. Key Figures * **New Orders (Q2 FY'26):** **₹1,042 Cr** · **Total Backlog:** **₹53,776 Cr** (as of 30 Sep '25) · **Executable Book:** **₹14,226 Cr** (excl. MDO) * **Additional Orders (Q3 FY'26):** **₹2,577 Cr** · **Updated Backlog:** **₹56,353 Cr** · **Executable Book:** **₹16,804 Cr** (excl. MDO) ## B. New Orders * **Strong Power Sector Momentum:** Significant order inflow anticipated in FY'26 across O&M, civil, mechanical, BOP, and EPC segments, driven by robust project pipelines from Adani, NTPC, and other utilities. * **Large-Scale Opportunity Pipeline:** Unplaced balance orders from developers—especially Adani’s 22 GW pipeline—could unlock **₹30,000–45,000 Cr** in ETC, civil, and BOP works. * **Selective Tender Participation:** Recent BOP win for Singareni Thermal Plant reflects strategic engagement; absence in Gadarwara/Nabinagar due to timing and prequalification filters. * **Price Protection Embedded:** Majority of contracts include **price escalation clauses**, enabling full pass-through of cost increases and safeguarding margins. ## C. Backlog Value * **Backlog Quality & Visibility:** Executable order book stands at **₹16,804 Cr**, with ~40% conversion expected annually; power civil, O&M, and mining to drive execution growth. * **Segment Concentration:** Power and infrastructure dominate the backlog, split at **₹8,300 Cr** and **₹5,900 Cr** respectively, with international exposure at **₹220 Cr**. ## D. Booking Target * **On Track for Target:** Company reaffirms confidence in achieving **₹10,000 Cr** annual booking target, with nearly half secured by early Q3 and **₹30,000–35,000 Cr** in tenders actively tracked. * **Long-Term Bidding Horizon:** Management eyes **₹2 lakh Cr** in bids over 5–7 years from a **₹3 lakh Cr** market opportunity, leveraging ~55% historical win rate for potential **₹1 lakh Cr** revenue realization. --- # 3. Segment Revenue ## A. Key Figures * **Mechanical Business Revenue:** ₹435 Cr Q2 (+90%) · ₹658 Cr H1 (+99%) * **Civil Business Revenue:** ₹309 Cr Q2 (-22%) · ₹890 Cr H1 (-5%) * **Electrical Business Revenue:** ₹89 Cr H1 (+427%) · ₹22 Cr O&M segment Q2 (+138%) * **O&M Division Revenue:** ₹440 Cr Q2 (+12%) · ₹837 Cr H1 (+14%) * **Mining Business Revenue:** ₹31 Cr Q2 (+164%) · ₹57 Cr H1 (+122%) ## B. Mechanical & Electrical Business * **Mechanical Surge:** Exceptional growth in mechanical revenue driven by accelerated FGD order execution amid government fast-tracking directives and strong industrial power construction demand. * **Electrical Ramp-Up:** Electrical segment posted strong rebound due to execution progress on **two railway packages in Chhattisgarh**, covering civil, signaling, telecom, and electrification works. * **Order Momentum:** Robust order inflows with **BOP EPC orders reaching ~₹2,550 Cr** to date, including major contributions from civil and O&M segments. ## C. Civil Projects * **Civil Revenue Pressure:** Decline in civil segment revenue attributed to prolonged monsoon disruptions at project sites and delayed bill certifications in water infrastructure projects. ## D. O&M Division * **Sustained O&M Opportunity:** Long-term revenue visibility with an annual O&M opportunity pipeline of **₹1,200–1,500 Cr** over the next 5 years, supported by post-commissioning demand lasting **7–8 years**. * **High-Value Contracts:** Post-commissioning O&M yields **₹11–15 lakh per MW/year**, underpinning attractive unit economics and recurring income potential. * **Margin & Growth Outlook:** O&M to drive EBITDA growth with **25–30% YoY CAGR** expected; MDO segment targeting **14–16% EBITDA margin** at ₹250 Cr scale. * **International Expansion:** Export opportunities in O&M being actively pursued, with early successes and strategic focus on upcoming commissioning schedules. ## E. Mining Revenue * **Mining Volume Growth:** Mining revenue surge driven by higher offtake volumes from **SAIL**, reflecting strengthened off-take arrangements and operational ramp-up. --- # 4. Capacity & Execution ## A. Key Figures * **Project Pipeline Target:** **8,000–10,000 MW** over 6–10 years * **EPC Project Duration:** **2–3 years** average (up to **38 months**) * Thermal Power Project Cost: ₹10 Cr/MW (incl. IDC) · EPC Cost: ₹8–8.5 Cr/MW * **EPC Opportunity Size:** **~₹1,000 Cr** for 1,600 MW plant (2 units) * **Udupi Project Value:** **₹936 Cr**, completion targeted by **March FY26** * **MDO Revenue Outlook:** **₹225–250 Cr** current year · **₹550–600 Cr** next year * **KBP Mining Output:** **50,000–60,000 TPM** (current limited capacity) * KBP Overburden Removal: **6.15 lakh CuM** by Oct 2025 * Tasra Coal Dispatch: **~8.7 lakh tons** since Jan 2024 * **EBITDA Margin (Mines):** **15–16%** expected at current run-rate * **Washery Capacity:** **35 MTPA**, targeted completion **Sep 2026** ## B. Project Progress * **Execution Momentum:** Strong mechanical segment execution ongoing from Q2, set to continue through March, underpinning high order fulfillment for FY26. * **Timeline Clarity:** Major EPC projects follow a 2–3 year cycle, with thermal power projects averaging 38 months, supporting predictable revenue recognition. * **Adani Udupi Acceleration:** ₹936 Cr Udupi project remains a key execution driver, with client-directed completion deadline in March FY26. * **Water Division Delay:** Project progress hampered by **slower bill certification due to fund non-allocation**, creating near-term execution headwind. * **Resurgence in Thermal Orders:** Growth trajectory supported by anticipated order inflow from BHEL and broader revival in thermal power sector. ## C. Mining Ramp-Up * **KBP Mining Operational:** Full equipment mobilization complete; mining began April 15, 2025, with coal production expected November 2025. * **Tasra Washery Advancing:** Environmental clearance secured, civil works and equipment mobilization underway, on track for **September 2026** commissioning. * **Near-Term Volume Ramp:** KBP targeting **1 crore tons** coal dispatch this year, with potential to scale to **15 crore tons** upon full ramp-up. * **Path to Margin Expansion:** Current **15–16% EBITDA margin** expected to improve materially as both mines reach **Peak Rated Capacity by FY28**, aided by washery commissioning. * **SAIL Mine Inflection:** SAIL’s Tasra mine to scale from **360,000 MTPA to 4 crore MTPA** in final five months of FY27, coinciding with washery commercial operations. --- # 5. Strategic Diversification ## A. Key Figures * **Project Scale:** **100 Mn ton** capacity expansion to 300 Mn ton by 2030–32 · **INR35,000–45,000 Cr** per 5 Mn ton plant * BOP Opportunity: INR3.5–4 Cr/project · 40–45% of total EPC cost * **Renewables Target:** **100 MW solar** · **200–250 MWh BESS** (FY '27) ## B. Steel Sector * **Major Growth Vector:** Strategic pivot into steel driven by **large-scale public and private capex**, including SAIL, NMDC, ArcelorMittal, and JSW expansions. * **Near-Term Visibility:** Significant contract awards expected in **next 3–6 months**, leveraging core strengths in **material handling, EPC, and O&M**. * **Diversification Imperative:** Reducing reliance on power (currently **75% of mix**) via targeted expansion into steel and mining value chains. ## C. Railways Infrastructure * **Focused Pursuit:** Railways represents a **material INR30,000 Cr opportunity pipeline**, aligned with core construction and project management capabilities. * **Strategic Realignment:** T&D activities being streamlined; dedicated team to pursue **integrated railway infrastructure projects** going forward. ## D. Green Energy * **Selective Expansion:** Pivot to **solar + BESS on BOOT basis** with creditworthy DISCOMs, avoiding irrational bidding in standalone solar. * **Scaled Ambition:** Plans to significantly increase renewable capacity in FY '27, targeting **100 MW solar** and **200–250 MWh BESS**. * **Emerging Adjacencies:** Exploring **data centre infrastructure** (power, civil, balance of plant) as a natural extension of core EPC expertise. --- # 6. Risks & Collections ## A. Key Figures * **Outstanding Receivables (JJM):** **₹226 Cr** (certified) · **₹220 Cr** work under certification * **Total Unbilled Revenues:** **₹960 Cr** (₹220 Cr water division, ~₹700 Cr ongoing projects) * **JJM Receivables Growth:** ₹226 Cr (Sep) → **₹287 Cr** (Mar) ## B. Receivables Delay * **Significant Working Capital Pressure:** Deterioration in net working capital days driven by **stuck receivables** from Jal Jeevan Mission projects amid delayed fund allocation by Central Government. * **Active Resolution Underway:** Management engaging UP and Central Governments—following CM-level meeting—to expedite certification and fund release, targeting resolution by **March**. * **Coal Business Headwinds:** SAIL’s coal offtake remains below plan due to **external washery constraints**, delaying expected revenues and contributing to financial deleveraging concerns. * **Liquidity Outlook:** Recovery of **₹446 Cr** in certified and uncertified JJM dues expected to materially improve cash flow and reduce working capital dependency. --- # 7. Guidance & Outlook ## A. Key Figures * **FY26 Revenue Guidance:** **₹6,200–6,300 Cr** (revised down from ₹6,500 Cr target) · **₹250 Cr** from mining (vs. ₹84 Cr prior) * **FY27 Revenue Projection:** **₹7,500–8,000 Cr** (+20–25% YoY) · **₹550–600 Cr** expected from mining ramp-up * **Peak Mining Revenue:** **₹2,000 Cr+** annually at full scale · **23–25% EBITDA margin** targeted at peak * **Power Capacity Outlook:** **8,000–10,000 MW/year** additions expected · **40,000–45,000 MW** in new orders likely over 2 years ## B. Revenue Forecast * **Upward Growth Trajectory:** Revenue outlook reflects a significant step-up from current run-rate, driven by strong order visibility and government-led power infrastructure push. * **Near-Term Order Momentum:** Substantial order inflow expected in next 6 months after initial delays, with BHEL and L&T serving as key EPC partners for NTPC, Adani Power, and others. * **Long-Term Market Expansion:** Government plans to add **80,000–100,000 MW** of thermal capacity ensure structural demand for power projects over the next 7–8 years. * **Backlog Visibility:** Total planned project pipeline of **80,000–85,000 MW** provides multi-year revenue visibility, despite execution risks around clearances and land acquisition. ## C. Margin Expectation * **Stable Margins in FY26:** EBITDA margins expected to hold flat to FY25 levels, with potential upside from higher-margin O&M and MDO contributions. * **Margin Leverage in FY27:** Structural improvement anticipated as MDO and O&M segments scale, with mix-driven margin expansion possible. * **Thermal Power Resilience:** Despite long-term decarbonization trends, thermal plants remain critical for grid stability, supporting demand for related services through **2047–2050**. ## D. Mine Contribution * **Mining Revenue Inflection:** FY27 to see major ramp-up in mining revenue from SAIL and CCL mines, with combined output reaching **25–30 MTPA** and contributing **₹550–600 Cr**. * **High-Margin Potential:** At peak, mining segment could deliver **23–25% EBITDA margins** on **₹2,000 Cr+** annual revenue, significantly enhancing returns. * **Market Share Targets:** Company aims for **30% share in civil/structural** and **35–45% in BoP services**, underpinning revenue conversion from project pipeline.