Summary
H.G. Infra Engineering Limited - Q3 FY26 Earnings Call Summary Friday, February 13, 2026 4:00 PM
Event Participants
Executives 2 Harendra Singh (Chairman and Managing Director), Rajeev Mishra (Chief Financial Officer)
Analysts 6 Bhavin Modi, Ishita Lodha, Manish Gadia, Mohit Kumar, Shravan Shah, Vaibhav Shah
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Order Book | ₹13,624 crores | Diversified mix: Roads (64%), Railways (20%), Renewables (15%), Others (1%). |
| Standalone Revenue | ₹1,450 crores | -5.7% YoY; Impacted by prolonged monsoon and delayed appointed dates. |
| Standalone EBITDA | ₹224 crores | 15.5% Margin; Remained relatively stable as normal EPC margins. |
| Standalone PAT | ₹97 crores | 6.7% Margin; Impacted by higher tax provisioning (32% vs 25% normal). |
| Gross Debt (Standalone) | ₹1,945 crores | Increased due to working capital needs and ₹731 crore equity infusion in solar SPVs. |
| Net Worth (Consolidated) | Not Specified | Consolidated debt reported at ₹6,032 crores with cash of ₹255 crores. |
| Order Inflow (9MFY26) | ₹3,300 crores | Target of reaching ₹4,000–5,000 crores by March 2026. |
Geographic & Segment Commentary
- Roads & Highways: Represents 64% of the order book (₹8,734 crores). Key projects like Ganga (99%) and Karnal Ring Road (94%) are nearing completion, while the MSRDC Nagpur-Chandrapur project (₹4,200 crores) awaits land acquisition, expected by April/May 2026.
- Railways & Metro: Strategic diversification with 7+ ongoing projects and a ₹2,779 crore order book. Performance was slowed by monsoon rain, but execution is picking up at the New Delhi Railway Station (6.9%) and Thane Metro (mobilization stage).
- Renewables (Solar & BESS): Solar projects (600 MW) are 95.8% complete with ₹731 crores equity invested. BESS segment has a ₹1,620 crore order book across three projects with GUVNL and NVVN, expected to generate ₹225 crores in annual revenue upon commissioning.
Company-Specific & Strategic Commentary
- Sector Diversification: The company is moving beyond roads into Solar, Transmission, and Battery Energy Storage Systems (BESS) to align with national infrastructure trends.
- Asset Monetization: A binding agreement is in place to divest 5 HAM assets to Neo Infra Income Opportunities Fund. Management expects ₹500–600 crores as the first tranche of consideration by March 2026.
- Project Execution: Management noted shifts in bid preparation, focusing on DPR (Detailed Project Report) validation and 70% land acquisition prerequisites to minimize future delays.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue (FY26) | ~₹6,200 - 6,300 crores | Revised slightly downward from ₹6,500 crores due to delayed Jharkhand Package-10. |
| Revenue (FY27) | ~₹7,000 crores | Assumes ₹1,500 crores from new/pending projects (MSRDC) and ₹5,500 crores from existing book. |
| Order Inflow (FY27) | ₹10,000 - 12,000 crores | Driven by massive NHAI pipeline (~₹6 lakh crores) and solar/railway bids. |
| EBITDA Margin | 14.0% - 15.0% | Management expects a slight correction in future bids due to competition but will not bid below 14%. |
Risks & Constraints
| Risk | Context |
|---|---|
| Execution Delays | Land acquisition in Maharashtra (MSRDC) and Jharkhand has delayed the start of multi-billion rupee projects by over 18 months. |
| Leverage & Liquidity | Temporary debt spike to ₹1,945 crores (standalone) due to delayed solar debt disbursements and equity locking in SPVs. |
| Regulatory Search | Recent CBI search in Patna offices created investor concern, though management maintains there is no material impact on operations. |
Q&A Highlights
Order Pipeline & MSRDC
- Question: What is the status of the ₹42 billion Nagpur EPC orders and cancellation risk? (Mohit Kumar)
- Answer: No risk of cancellation; land acquisition was slowed by local elections. Expecting 70% land availability to trigger the Letter of Award by April or May 2026, with work starting in H2FY27 (Harendra Singh).
Solar Debt and Cash Flow
- Question: When will the debt levels come down following solar project completion? (Vaibhav Shah)
- Answer: Solar projects are 98% complete. We expect a ₹425 crore disbursement from lenders in Q1FY27 once commissioning is finished, which will be used to deleverage (Harendra Singh).
Margins and Competition
- Question: Is the 15% margin sustainable given increasing competition? (Shravan Shah)
- Answer: Current hand-held projects have 15%+ margins. Future bids may see a correction to ~14% due to market trends, but the company will avoid the 10-12% range (Harendra Singh).
CBI Investigation
- Question: Can you clarify the reason for the CBI search and recent executive exits? (Vivek Joshi)
- Answer: The matter is subjudice. Information has been disclosed to stock exchanges. Executive exits are not related to this specific matter, and there is no impact on company operations (Harendra Singh).
Asset Monetization
- Question: What is the timeline for the HAM asset sale? (Shravan Shah)
- Answer: NOCs from lenders for 3 SPVs are expected shortly. We anticipate completing the transaction for at least 3 projects within the current financial year (Harendra Singh).
Key Takeaway
H.G. Infra delivered a steady Q3 FY26 despite operational headwinds from a prolonged monsoon and regulatory delays in land acquisition. The company reported standalone revenue of ₹1,450 crores and is pivoting towards a more diversified order book of ₹13,624 crores, where non-road segments (Rail, Metro, and Solar/BESS) now comprise 36% of the total. Strategic focus remains on debt reduction through the monetization of 5 HAM assets (expected ₹500–600 crore inflow) and the commissioning of 600 MW of solar capacity. While FY26 revenue guidance was moderated to ~₹6,300 crores, management remains optimistic for FY27, targeting ₹7,000 crores in revenue and ₹10,000+ crores in new orders. Investors should monitor the timely commencement of the MSRDC projects and the successful closure of the HAM asset sale as key catalysts for deleveraging.
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