Transrail Lighting Limited Q3 FY26 Earnings Call Summary

Summary

Transrail Lighting Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 03, 2026 4:00 PM

Event Participants

Executives 2 Deepak Khandelwal (CFO), Randeep Narang (MD & CEO)

Analysts 10 Anshul Jethi, Aryan Bhatia, Balasubramanian, Disha, Hrishit Jhaveri, Jainam Doshi, Khushbu Gandhi, Mahek Talati, Naman Parmar, Pritesh

Financials & KPIs

Geographic & Segment Commentary

• Domestic T&D: Remains the primary driver representing 57% of the order book and ~90% of total business. Management commissioned significant high-capacity projects including the 765 kV Khetri-Narela and Ahmedabad-Lakadia lines.
• International (Africa & SAARC): Comprises 43% of the order book with ₹4,000 crores in Africa and ₹1,200 crores in SAARC (primarily Bangladesh). The Bangladesh project is on track for completion by July 2027 with ₹488 crores in receivables.
• MENA/GCC: Newly entered geography with an initial footprint of ₹750-800 crores across Abu Dhabi, Oman, and Jordan. Management identifies a ₹10,000-15,000 crore bid potential in this region over the next 12 months.
• Civil & Railways: Focus is strictly on heavy engineering-led jobs like bridges, cooling towers, and elevated roads. Management explicitly ruled out entering residential buildings or general road construction.

Company-Specific & Strategic Commentary

• Capacity Expansion: Brownfield (Phase 1) expansion is 70% operational with 100% expected by Feb-end 2026. A new greenfield tower factory is slated for inauguration in March/April 2026, effectively doubling tower and conductor capacity.
• Digital Transformation: Initiated migration from SAP HANA to SAP RISE. This initiative aims to enable real-time data decision-making and deepen cost discipline across all factories and project sites.
• Credit Profile: Net debt-to-EBITDA stands at a healthy 0.57x. Interest costs as a percentage of revenue improved to 3.3% (vs 4.1% YoY) due to recent credit rating upgrades.
• Quality Bidding: Management maintains a selective bidding approach focused on 11.5-12% EBITDA margins rather than growth at any cost.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Order Inflow & Pipeline

• Question: What is the outlook for order inflows for the next year? (Pritesh)
• Answer: We expect to cross ₹9,500-10,000 crores this year. The 12-month addressable pipeline is ₹1 lakh crore (60% domestic, 40% international), where we target a 10-12% win ratio (Randeep Narang).

Cash Flow & Receivables

• Question: Why are contract assets higher than peers at 25-29% of sales? (Nikhil)
• Answer: It is within industry norms but slightly elevated due to specific collection delays. We expect normalization by March 2026 as Q4 is typically the strongest for collections (Randeep Narang).

Bangladesh Operations

• Question: What is the status of the Bangladesh project and receivables? (Jainam Doshi)
• Answer: Project is expected to finish by June/July 2027 with ₹600-700 crores left for next year. Receivables stand at ₹488 crores and are being collected on time (Randeep Narang).

Input Costs

• Question: Will rising copper and steel prices impact margins? (Mahek Talati/Hrishit Jhaveri)
• Answer: Copper has no impact as we don’t do significant underground cabling. Steel has softened over the last six months and is factored into EPC bids with contingencies (Randeep Narang).

Key Takeaway

Transrail Lighting delivered a robust Q3 FY26, with revenue growing 32% YoY to ₹1,796 crores and 9-month PAT surging 62% to ₹324 crores. The company is successfully scaling its core T&D business, which maintains a 90% share of the ₹18,216 crore effective order book. Strategically, Transrail is doubling its manufacturing capacity through brownfield and greenfield expansions due for completion by April 2026, while simultaneously upgrading its digital backbone via SAP RISE. Financial health remains strong with a low debt-to-equity of 0.39x and improved working capital of 83 days. Management upgraded FY26 revenue growth guidance to 27%+ and expressed confidence in a ₹1 lakh crore bid pipeline. While Right of Way (ROW) and forest clearances remain monitorable execution risks, the company is well-positioned to capitalize on India’s grid expansion and increased Power Grid CAPEX.