Summary
PSP Projects Limited - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026 4:00 PM
Event Participants
Executives 3 Hetal Patel, P. S. Patel, Pooja Patel
Analysts 9 Arpit Mundra, Balasubramanian, Bajrang, Bhavik Shah, Bhavin Modi, Hemkesh Khattar, Het, Rahul Kumar, Shravan Shah, Vaibhav Shah
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹771 crores | +24% YoY; Highest ever quarterly revenue driven by strong execution and better labor deployment. |
| EBITDA | ₹52 crores | +47% YoY; Reflects an EBITDA margin of 6.73%. |
| Net Profit | ₹16 crores | +159% YoY; Strong growth despite a ₹8 crore one-time impact from new labor code provisions. |
| Order Book | ₹9,178 crores | +43% YoY; 59% of the order book is from group (Adani) projects while 41% is external. |
| Order Inflow (Q3) | ₹957 crores | +151% YoY; Primarily driven by Adani Group project awards. |
| Net Unbilled Revenue | ₹648 crores | Reflects projects in advanced stages of MEP and finishing. |
| Total Debt | ₹389 crores | Comprises ₹25 crore long-term and ₹364 crore short-term borrowings. |
| Capex (9M FY26) | ₹153 crores | Asset heavy quarter due to ₹80 crore deployment for Adani project equipment and shuttering. |
| Gross Block | ₹762 crores | Substantial increase following investment in cranes and precast equipment. |
Geographic & Segment Commentary
- Gujarat: Remains the primary hub representing 82% of the outstanding order book. Key projects include the SMC High Rise (₹835 crores) and Sabarmati Riverfront Development (₹245 crores).
- Maharashtra: Accounts for 14% of the order book, dominated by the Mahim (Dharavi) project valued at ₹1,300 crores. Execution is currently focused on completing massive excavation and sheet piling works.
- Group vs. External: Group projects (Adani) now constitute 59% of the order book. Management is shifting focus toward larger, selection-based external projects like the Ambaji Corridor (L1 for ₹965 crores) while maintaining the group-heavy mix.
Company-Specific & Strategic Commentary
- Adani Group Partnership: The company has pivoted to a “cost-plus” model for group projects, which now comprise 60% of the bid book (₹3,900 crores). This strategy mitigates commodity price risks as costs are 100% pass-through.
- New Labor Code Impact: A one-time hit of ₹8 crores was taken in Q3 due to provisions for gratuity and leave encashment under the new code notified in Nov 2025. This suppressed margins by ~100 bps in the current quarter.
- Precast Facility: The precast plant is operating at 80-90% utilization, primarily for captive use (internal and Adani projects). This vertical is critical for the rapid execution of institutional and residential colony projects.
- Arbitration Success: Favorable award received in the Bhiwandi BMCMC matter for a principal amount of ₹61.44 crores plus 9% interest, totaling approximately ₹80 crores.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue | ₹3,100 – ₹3,200 crores (FY26) | Back-ended execution in Q4 (target ₹1,100cr+) as projects enter finishing stages. |
| Revenue | ₹4,000 – ₹4,500 crores (FY27) | Expected growth driven by a massive opening order book and Adani project scaling. |
| EBITDA Margin | 8.0% – 9.0% | Normalization expected as one-time labor code costs do not recur and execution ramps up. |
| Order Inflow | ₹7,000 – ₹8,000 crores (FY27) | Anticipated from Adani Group requirements and selective large-scale government bids. |
| Net Margin | 3.5% – 4.0% | Long-term target as depreciation and finance costs stabilize relative to higher revenue. |
Risks & Constraints
| Risk | Context |
|---|---|
| Execution Delays | Complex projects like Dharavi/Mahim face excavation challenges in Mumbai (no blasting allowed). Any delay in foundation starts impacts revenue recognition. |
| Customer Concentration | With 59% of the order book and the majority of future inflows tied to one group, any strategic shift by the client could materially impact PSP’s pipeline. |
| Receivable Aging | ₹90 crores remains pending from the Surat Diamond Bourse (SDB) project, though management expects payment with interest based on court commitments. |
Q&A Highlights
Execution & Revenue Run-rate
- Question: How will you reach the FY26 revenue guidance given the 9M run-rate? (Shravan Shah)
- Answer: Management is confident in reaching ₹3,100-3,200 crores as many projects are currently in the MEP and finishing phases, which typically see higher billing intensity. Q4 is expected to deliver ₹1,100-1,200 crores (P. S. Patel).
Margin Sustainability
- Question: Why are EBITDA margins still below historical levels? (Shravan Shah)
- Answer: Q3 was impacted by a ₹8 crore one-off labor code provision. Without this, margins would have been ~7.7%. Future projects for the Adani Group are structured to yield 8-9% margins on a pass-through basis (P. S. Patel).
Dharavi/Mumbai Progress
- Question: Is there a delay in the Dharavi project due to local political changes? (Bajrang)
- Answer: No impact from political changes; delay in the Mahim block was purely technical due to the complexity of deep excavation and sheet piling in Mumbai. Foundation work is expected to start within 1-2 months (P. S. Patel).
Order Book Revisions
- Question: Why is there a gap of ₹800 crores in the order book math? (Vaibhav Shah)
- Answer: This is due to a mix of project cancellations (₹143 crores), scope reductions in certain revised orders, and splitting of contracts between services and materials (P. S. Patel / Hetal Patel).
Key Takeaway
PSP Projects delivered its highest-ever quarterly revenue of ₹771 crores in Q3 FY26, marking a 24% YoY growth despite a 100 bps margin hit from new labor code provisions. The company has successfully pivoted its business model toward the Adani Group, which now accounts for 59% of the ₹9,178 crore order book and approximately 60% of the ₹6,600 crore bid pipeline. Strategic investments of ₹153 crores in capex this year (predominantly for cranes and shuttering) support a massive execution ramp-up, with management targeting ₹4,000-4,500 crores in revenue for FY27. While execution in Mumbai (Dharavi) has seen initial technical delays in excavation, the core Gujarat market remains robust. The focus remains on maintaining a 8-9% EBITDA margin profile through cost-plus contracts and resolving legacy receivables like the ₹90 crore SDB dues and the ₹80 crore Bhiwandi arbitration award. Management anticipates a high-growth trajectory as it transitions from a standalone contractor to a preferred partner for large-scale institutional developments.
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