Markolines Pavem — Q2 FY26 earnings call

Call held 20 Nov 2025

Management summary

Markolines Pavement Technologies reported robust Q2 and H1 FY26 results, driven by strong revenue and PAT growth. The company highlighted its significant order book and pipeline, alongside strategic initiatives in specialized construction and technological innovation. Management expressed confidence in achieving aggressive growth targets for the coming years, leveraging India's infrastructure boom, despite acknowledging margin fluctuations and the capital-intensive nature of the business.

Highlights

  • Q2 FY26 Revenue increased by 39% YoY to INR 77.67 crores.

  • Q2 FY26 PAT grew by 69% YoY to INR 4.08 crores.

  • H1 FY26 Revenue showed a 42% growth over the last half, and H1 FY26 PAT grew by 90%.

  • Strong unexecuted order book of INR 396 crores and an active pipeline of INR 600 crores.

  • Management is targeting at least 30% revenue growth for FY26 and over 100% growth in the next 3 years.

Concerns

  • EBITDA margins fluctuate due to client-specific machinery deployment and associated costs (depreciation and interest).

  • The business is dependent on workforce and is capital intensive due to cyclic operations and short-term project life.

  • Fluctuating raw material prices, though addressed by escalation clauses in contracts.

Key financials

2 periods

Headline

  • Revenue
    ₹77.67 Cr
    YoY +39% QoQ +6%
  • PAT
    ₹4.08 Cr
    YoY +69% QoQ +7%
  • EPS
    ₹1.7
    YoY +73%
  • EBITDA Growth
    27%
    YoY +27%

H1

  • Revenue Growth
    42%
    YoY +42%
  • PAT Growth
    90%
    YoY +90%
  • EBITDA Growth
    40%
    YoY +40%

What they filed

Q1 FY27: revenue down 15.3%, net profit up 15.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue56 80 115 73 78 +40%80 +0%93 −19%62 −15%
EBITDA6 8 19 7 7 +20%10 +33%16 −15%7 −5%
Net profit2 6 12 4 4 +66%7 +13%11 −8%4 +15%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹396 Cr

as of 2025-09-30 quantified

Execution

to be executed over from next 1, 1.5 years

Pipeline

L1 awaiting loa

active pipeline of orders

The company has a strong unexecuted order book and a robust pipeline, with a major order disclosure expected soon.

Source: Prepared remarks

Capital allocation

medium confidence
  • M&A Markolines Infra Merger · Pending regulatory

    Consolidation of operations within the Markolines group.

    As informed earlier, we have already announced the merger for the Markolines Infra with Markolines Pavement. ... merger is going on. We shall be submitting some papers once the since we have declared the updated papers will be submitted to Exchange in next 10 days' time.
  • Liquidity Liquidity disclosed Working capital cycle is generally about 90 days, extending to 90 to 120 days on some projects.
    So, working capital cycle keeps, by and large, though we say it is about 90 days, but on a few projects because of various things, generally, it lies about 90 to 120 days.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 30%
    As we have already said, we are expecting at least 30% growth over last year.

    — Vijay Oswal

  • Revenue Growth Revenue · next 3 years · High confidence 30%
    if I have to achieve a real good growth over next 3 years, we will be keeping the same pace of growth over at least next 3 years.

    — Vijay Oswal

Overall Growth

  • Overall Growth Overall Growth · coming 3 years · Medium confidence more than 100%
    Now as far as growth goes, I have also said in my earlier presentation that we are looking more than 100% growth in coming 3 years.

    — Vijay Oswal

Bidding Capacity

  • Solo Bid Capacity Bidding Capacity · current · High confidence INR 500 crores to INR 700 crores
    in solo bid capacity, we can bid up to about INR 500 crores to INR 700 crores of work.

    — Vijay Oswal

What to watch in Q3 FY26

Conversion of pipeline into confirmed orders

Next quarter (Q3 FY26)
Current INR 600 crores in pipeline, one major order expected 'as short as this week'
Target Announcement of major order(s) and reduction in pipeline

Why it matters

Order conversion directly impacts future revenue visibility and execution, crucial for achieving growth targets.

working on INR 600 crores of pipeline. Probably as short as this week, we will likely to come up with one major order disclosure, which we have already finalized and about to disclose.

Risks & concerns

  • Fluctuating raw material prices

    medium

    Dependency on fuel and bituminous products, but contracts include escalation clauses to mitigate impact.

    Management acknowledged

  • Capital intensive nature of business

    medium

    Cyclic operations and short-term project life make the business high capital intensive, impacting EBITDA margins due to machinery deployment costs.

    Management acknowledged

  • Dependency on workforce

    low

    Workforce is a key dependency, but labor is hired on a contract basis for project flexibility.

    Management acknowledged

Q&A highlights

8 direct
Long-term growth outlook and industry leadership strategy Direct
looking more than 100% growth in coming 3 years... we will definitely try to fill in our commitment rather we will try and surpass our commitments... looking at the allied infrastructure industries also wherein we could add some more growth to the company.

Management outlined an aggressive long-term growth target and detailed its strategy focusing on innovation, client-centric solutions, and expansion into allied infrastructure to maintain industry leadership.

Asked by Rahul Kamdar

EBITDA margin decline and measures for improvement Direct
EBITDA margins... keep fluctuating because EBITDA margin varies because of the clients' requirement in terms of deploying the machinery... work with the client on a cost-plus basis model ensuring our returns... we are slowly increasing in terms of our net profitability.

The response clarifies that margin fluctuations are inherent to client-specific project requirements but are managed through a cost-plus model, with a strategic focus on specialized activities to improve overall net profitability.

Asked by Laxmikant Khanvilkar

Current order book position and pipeline Direct
current unexecuted order book as of 30th September... is about INR 396 crores, and we are working on INR 600 crores of pipeline. Probably as short as this week, we will likely to come up with one major order disclosure...

Provides clear, quantified visibility on the company's near-term revenue stream and potential future orders, which is crucial for assessing growth prospects in the construction sector.

Asked by Yashwanti K.

Working capital cycle Direct
working capital cycle keeps... about 90 days, but on a few projects because of various things, generally, it lies about 90 to 120 days.

Offers insight into the company's cash conversion efficiency, a critical metric for capital-intensive businesses, indicating a manageable working capital period.

Asked by Yashwanti K.

Impact of extended monsoon on H1 growth Direct
this year, learning with the last years' experience, we had already planned and there are 2 reasons where we have given better performance over last year... we planned few orders where the work would not be affected through the monsoon... specialized construction activities like tunneling, which generally are not affected during the monsoon much.

Highlights management's proactive planning and the resilience of specialized construction segments in mitigating seasonal risks, contributing to better H1 performance despite extended monsoons.

Asked by Pranay Shah

Revenue growth anticipation for FY26 and FY27 Direct
this year, we are looking at about 30% growth over last year... if I have to achieve a real good growth over next 3 years, we will be keeping the same pace of growth over at least next 3 years.

Reconfirms the company's consistent 30% annual revenue growth target for the medium term, providing clear guidance for investors.

Asked by Shaurya Punyani

Solo bidding capacity Direct
in solo bid capacity, we can bid up to about INR 500 crores to INR 700 crores of work.

Indicates the scale of projects the company can independently pursue, showcasing its capability to handle larger contracts without partnerships.

Asked by Yashwanti K.

Employee strength and labor model Direct
about over 250 people working. And as far as the labor that is required, we hire them on a contract basis as we keep moving the basis from places to places.

Clarifies the company's human capital strategy, distinguishing between permanent staff and flexible contract labor, which is essential for project-based operations.

Asked by Yashwanti K.

2 min read 6 chapters

Detailed narrative

Strong Q2 and H1 FY26 Financial Performance

Markolines Pavement Technologies reported robust financial results for Q2 FY26, with revenue growing 39% YoY to INR 77.67 crores and PAT increasing 69% YoY to INR 4.08 crores. The first half of FY26 also demonstrated significant growth, with revenue up 42% and PAT up 90% compared to H1 FY25. This strong performance was achieved despite the monsoon season, indicating effective planning and execution.

Robust Order Book and Pipeline for Future Growth

The company maintains a healthy unexecuted order book of INR 396 crores as of September 30, 2025, providing revenue visibility for the next 1 to 1.5 years. Complementing this, Markolines has an active pipeline of INR 600 crores, with a major order disclosure anticipated shortly. This strong order book and pipeline are expected to drive future revenue growth and support the company's ambitious targets.

Strategic Focus on Innovation and Specialized Services

Markolines continues to leverage its market leadership through continuous innovation and the adoption of new technologies in highway maintenance, such as micro-surfacing and Cold In Place Recycling (CIPR). The company has also expanded into specialized construction activities like tunneling and soil stabilization, which offer resilience against seasonal impacts and contribute to higher profitability. This strategic focus helps Markolines differentiate itself and secure complex projects.

Ambitious Growth Targets and Industry Outlook

Management is highly optimistic about future growth, targeting at least 30% revenue growth for FY26 and aiming for over 100% growth in the next three years. This outlook is underpinned by India's rapidly expanding highway infrastructure, which is growing at 34 kilometers per day, and increasing privatization of road assets. Markolines' solo bidding capacity of INR 500-700 crores further positions it to capitalize on these opportunities.

Operational Efficiency and Margin Management

While EBITDA margins can fluctuate due to client-specific machinery deployment and associated costs, Markolines operates on a cost-plus model to ensure consistent returns. The company is committed to enhancing operational efficiencies and maintaining financial discipline. The strategic shift towards specialized construction activities is expected to contribute to increasing net profitability, as evidenced by the 26% CAGR in PBT and 31% CAGR in PAT from FY22 to FY25.

Merger and Listing Milestones Achieved

Markolines has successfully transitioned from the SME platform to the Mainboard of BSE and is now also listed on NSE, enhancing its visibility and access to capital. The merger of Markolines Infra with Markolines Pavement is currently underway, with necessary documentation expected to be submitted to the Exchange within the next 10 days. This consolidation is anticipated to streamline operations and strengthen the company's overall market position.

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