Detailed Narrative
Q3 FY26 Financial Performance Overview
Anantam Highways Trust reported a robust Q3 FY26, with consolidated revenue reaching INR123.8 crores and EBITDA at INR105.6 crores. This performance, driven by the acquisition of SPVs on October 10, 2025, reflects the inherent strength of its annuity-based Hybrid Annuity Model (HAM) portfolio. The Trust declared a distribution of INR2.50 per unit, totaling INR54.4 crores, for the quarter ended December 31, 2025, marking its first meaningful distribution.
Strategic Vision and AUM Growth Targets
The company aims to become one of India's largest road InvITs, targeting a 5x growth in Assets Under Management (AUM) to INR25,000 crores by 2029 from the current INR4,500 crores. Management indicated clear visibility to double the InvIT's AUM by H1 FY27. This growth will be pursued through accretive acquisitions from a strong Right of First Offer (ROFO) pipeline with Dilip Buildcon and Alpha Alternatives, as well as selectively from third-party assets, ensuring both DPU and NAV accretion.
Capital Structure and Debt Management
Anantam maintains a prudent capital structure with a debt-to-EV ratio of 42.11%, well within regulatory norms, and an AAA Stable credit rating. The average cost of borrowing is 7.5%, which management plans to reduce in coming quarters through diversified borrowing compositions. The NAV increased from INR114 in June 2025 to INR120 in December 2025, primarily due to strategic debt prepayment and the unwinding of value, providing flexibility for future acquisitions.
Differentiated Business Model and Governance
The Trust operates with a unique financial-sponsored InvIT model, managed by Alpha Alternatives Fund-Infra Advisors, ensuring best-in-class investment management and robust governance. Dilip Buildcon, as the operational partner, provides strong execution capabilities and fixed-price O&M contracts, eliminating traffic risk and ensuring predictable cash flows from HAM assets. This structure is designed to avoid conflicts of interest and deliver long-term value to unitholders.
Distribution Policy and Investor Returns
Anantam's objective is to provide predictable, sustainable, and growing distributions, combined with NAV growth through accretive acquisitions, aiming for a total return of 12-14% (compared to 10-12% for a static portfolio). Management clarified that the initial INR2.50 per unit distribution is just the start of their journey, with future distributions expected to increase as the InvIT scales and accretive assets are added to the portfolio.
Taxation and Reserves
The company's tax rate this quarter was influenced by SPVs operating under the old tax regime and deferred tax. Management is currently deliberating on its tax strategy in light of recent budget changes, with clearer positions expected by Q4 FY26. Reserves have been created for tax purposes and to cover specific claims, such as those related to fly ash during the construction period, which are pass-through items to the EPC contractor.