Rajesh Power — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Rajesh Power Services Limited delivered a strong H1 FY26 performance, marked by significant revenue and profit growth, driven by robust project execution and substantial order inflows. The unexecuted order book provides healthy revenue visibility. However, the company acknowledges challenges related to cash flow management due to industry-specific working capital requirements and ROW issues in transmission projects.

Highlights

  • Revenue grew by an impressive 104% to ₹638 crore in H1 FY26, driven by well-planned project execution and a diversified order book.

  • EBITDA increased by 126% to ₹84 crore, achieving an EBITDA margin of 13.16% in H1 FY26.

  • PAT increased by 99% to ₹59 crore, with a PAT margin of 9.22%, reflecting strong operational performance.

  • Order inflow surpassed ₹2,200 crore in just six months, demonstrating robust execution strength and customer trust.

  • The unexecuted order book surpassed ₹3,500 crore, providing strong revenue visibility for the next 18-24 months.

Concerns

  • Cash flow from operations appears slightly negative due to the nature of the EPC business, involving significant retention money, security deposits, and performance guarantees.

  • Transmission projects, particularly overhead lines, continue to face Right-of-Way (ROW) challenges, which can impact execution timelines.

Key financials

  1. Revenue ₹638 Cr +104%YoY
  2. EBITDA ₹84 Cr +126%YoY
  3. EBITDA Margin 13.2%
  4. PAT ₹59 Cr +99%YoY
  5. PAT Margin 9.2%
  6. Net Worth ₹322 Cr +189%YoY
  7. ROCE 42.9%
  8. ROE 36.5%
  9. Debt Equity Ratio 0.26
  10. Current Ratio 1.55

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue313 759 638 990
EBITDA37 87 84 113
Net profit30 67 59 84
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

₹3,500 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹2,200 Cr

Execution

roughly 18 months to 24 months

Composition

Mix 2 segments
  • Power Distribution 76%
  • Transmission 24%

Share of order book by segment

Pipeline

qualified rfp

low hanging pipeline of ₹2,000 crore, expecting to reach ₹5,000 crore

The unexecuted order book of ₹3,500 crore is executable over the next 18-24 months, with a strong pipeline of ₹5,000 crore expected in the coming months.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Debt disclosed
    Yeah. If you can provide us with some ballpark figures of the debt level set for FY26 for the whole year. I mean, for what I can see in the first half, it was around INR 80 crores, both long term and short term. So, can we expect it to be around INR 150 crores for the entire year? ... See, sir, as of now, our banking limits are around INR 270 CR, including fund base as well as non-fund base, and we are planning to enhance it to INR 400 CR, both including non-fund as well as fund base.
  • Liquidity Liquidity disclosed Cash flow from operations appears slightly negative due to retention money, security deposits, and warranty/performance guarantees.
    Sir, given the nature of the EPC business, the cash flow from operations tends to appear negative, especially around March and September, as these periods see major billing and project closures. So, if you look at the position as of September 30 or March 31, the numbers may seem slightly negative. From an operational standpoint, factors such as retention money, security deposits, and the warranty or performance guarantees which we are required to provide result in our fixed deposits being blocked. This is the primary reason why the cash flow from operations appears slightly negative.

Guidance & targets

Growth

  • CAGR across all key metrics Growth · next few years · Medium confidence 40%
    Certainly. Based on current market opportunities and our future projections, we anticipate achieving a CAGR of around 40% across all key metrics over the next few years.

    — Utsav Panchal

Order Inflow

  • Order inflow for full year Order Inflow · entire year · Medium confidence ₹5,000 crores
    Yes. So for the entire year, we can assume to say we are trying to achieve that figure for the combined entire year, not just in H2, but the entire year.

    — Utsav Panchal

Order Book

  • Expected closing unexecuted order book Order Book · FY26 · Medium confidence ₹4,500 crores
    I think from what we are estimating and based on the guidances that we have given, we are estimating that unexecuted order book to be somewhere around INR 4,500 crore.

    — Utsav Panchal

Banking Limits

  • Enhancement of banking limits Banking Limits · future · High confidence ₹400 crores

    Previously ₹270 crores → ₹400 crores

    See, sir, as of now, our banking limits are around INR 270 CR, including fund base as well as non-fund base, and we are planning to enhance it to INR 400 CR, both including non-fund as well as fund base.

    — Nikita Shah

HKRP Performance

  • HKRP top line growth HKRP Performance · this year · Medium confidence double digits
    This year, we are expecting it to grow by at least double digits, but we'll have a better clarity.

    — Utsav Panchal

What to watch in Q3 FY26

Order book execution velocity

next quarter
Current ₹3,500 crore unexecuted order book
Target Progress towards 18-24 month execution timeline

Why it matters

To assess the company's ability to convert its strong order book into revenue efficiently.

So, basically, our INR 3,500-crore order book consists of a mix of various projects, which have a start date and then a completion schedule of roughly 18 months to 24 months.

Risks & concerns

  • Cash flow blockage due to working capital requirements

    medium

    Cash flow from operations appears slightly negative due to retention money, security deposits, and performance guarantees inherent in the EPC business model.

    Management acknowledged

  • Right-of-Way (ROW) challenges for transmission projects

    low

    Slowdown in overhead line transmission projects is primarily related to ROW challenges, though projects are broadly on track.

    Management acknowledged

  • Limited competition in 400kV GIS segment due to government policy

    low

    Government policy restricts participation from countries sharing a border with India, limiting competition to a few leading MNCs like Siemens, Hyosung, Hitachi, and Toshiba.

    Management acknowledged

Q&A highlights

7 direct
Order book execution timeline Direct
So, basically, our INR 3,500-crore order book consists of a mix of various projects, which have a start date and then a completion schedule of roughly 18 months to 24 months.

Provides clarity on the expected revenue recognition period for the current order book.

Asked by Raman KV

H1 vs H2 business seasonality Direct
So, generally,, in our entire industry, the H2 is more dominating than H1, but roughly you can expect H1 in the ranges of 40% to 45% at max and the balance here to be executed in H2.

Explains the typical seasonal pattern of business execution and its impact on financial performance, including EBITDA.

Asked by Raman KV

Competition in 400-kV GIS segment Direct
So, after 2020, government issued a notification of not allowing any country that shares a border with India to participate in our bids or even to be a manufacturer in our bidding process, which includes GIS substations. So as of now, we have only few leading MNCs, which like Siemens, Hyosung, Hitachi, and Toshiba.

Highlights the competitive landscape and regulatory barriers in a high-value segment, indicating a limited pool of qualified players.

Asked by Raman KV

Impact on cash flow from operations Direct
Sir, given the nature of the EPC business, the cash flow from operations tends to appear negative, especially around March and September, as these periods see major billing and project closures. So, if you look at the position as of September 30 or March 31, the numbers may seem slightly negative. From an operational standpoint, factors such as retention money, security deposits, and the warranty or performance guarantees which we are required to provide result in our fixed deposits being blocked.

Clarifies the reasons behind negative cash flow from operations, attributing it to working capital requirements like retention money and security deposits inherent to the EPC model.

Asked by Naman Parmar

Conservatism of 40% CAGR guidance Partial
Yeah. But see, we have a seasonal business. So, what I was talking about with 40% CAGR was YoY revenue. And if we compare YoY revenue for EPC companies, that would make more sense as compared to quarterly or half yearly.

Addresses analyst's concern about the 40% CAGR being conservative given H1's 100% growth, by emphasizing the seasonal nature of the business and the YoY basis of the guidance.

Asked by Deepak Poddar

Pan-India expansion strategy Direct
Absolutely. So, you rightly said that we are majorly operating in Gujarat. But what we've done been doing over the few years. We've been able to make strides to enter the new states also. A very good case was, we entered the state of Rajasthan with just a mere INR 10 crore, INR 12 crore order in 2021, where we found comfortable working. And right now, we have order book in Rajasthan of more than around INR 200 crore/ INR 250 crore.

Details the company's strategy and progress in expanding beyond Gujarat into new states like Rajasthan, Uttarakhand, MP, Orissa, and Jharkhand, indicating future growth avenues.

Asked by Hriday Choksi

Engagement with the private sector Direct
Absolutely. We are actively engaged in the private sector. In Gujarat, there is a concept called Option 3, which is a deposit work model. Under this, any private utility—such as a large factory setting up or expanding its plant—must apply to the utility and make a deposit. The execution of the work must be carried out by a contractor approved by GETCO, the transmission utility.

Confirms the company's strong presence and preferred partner status in the private sector due to its ability to complete projects within strict timelines.

Asked by Pawan Kumar

Debt levels and working capital for growth Direct
Actually, as you are aware of, our CRISIL ratings are already upgraded. So, we are right now in the negotiating stage with our bankers. We are finalizing with our existing bankers as well as we are adding new bankers, with the additional working capital limit, both fund base as well as non-fund base. And that would be, I think, more than sufficient for executing these much orders.

Provides insight into the company's strategy for financing future growth, including plans to enhance banking limits to support increased working capital needs.

Asked by Raman KV

2 min read 5 chapters

Detailed narrative

Strong H1 FY26 Financial Performance

Rajesh Power Services Limited reported robust financial results for H1 FY26, with revenue growing by an impressive 104% to ₹638 crore. EBITDA saw a 126% increase, reaching ₹84 crore, translating to an EBITDA margin of 13.16%. Net Profit after Tax (PAT) also surged by 99% to ₹59 crore, achieving a PAT margin of 9.22%. These figures underscore the company's strong operational execution and strategic growth initiatives.

Significant Order Book and Pipeline

The company achieved a remarkable order inflow of ₹2,200 crore in the first six months of FY26, contributing to an unexecuted order book exceeding ₹3,500 crore. This order book is expected to be executed over the next 18 to 24 months, providing strong revenue visibility. Management anticipates a full-year order inflow of ₹5,000 crore and projects the closing unexecuted order book for FY26 to be around ₹4,500 crore, indicating sustained growth momentum.

Strategic Expansion and Market Diversification

Rajesh Power is actively expanding its geographical footprint beyond Gujarat, with successful entries into states like Rajasthan, where the order book now stands at ₹200-250 crore. The company is also executing projects in Uttarakhand and exploring opportunities in Madhya Pradesh, Orissa, and Jharkhand. This diversification strategy aims to leverage growing infrastructure spending across India and reduce regional concentration risk.

Focus on High-Voltage Segments and Smart Grid Solutions

The company has made a significant breakthrough by entering the 400 kV gas-insulated substation (GIS) segment, positioning itself for larger multi-central power grid projects. Additionally, its partnership with HKRP Innovations Limited focuses on smart-energy management solutions, including SCADA systems and IoT-based tools. This strategic focus on advanced technologies and higher voltage segments enhances its capabilities and market reach.

Working Capital Management and Funding Plans

Despite strong operational performance, cash flow from operations appears slightly negative due to the inherent nature of the EPC business, which requires significant retention money, security deposits, and performance guarantees. To support its ambitious growth targets, the company plans to enhance its banking limits from the current ₹270 crore to ₹400 crore, which is expected to be sufficient for executing future orders without immediate fundraising.

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