Arisinfra Solutions Q1 FY27 earnings call

Arisinfra Solutions Limited reported a robust Q1 FY27, with revenue from operations growing 37% YoY to INR 291 crores. EBITDA saw an even stronger increase of 68% YoY, reaching INR 31 crores, which translated into a 191 basis point expansion in EBITDA margins to 10.49%. This significant margin improvement is primarily attributed to a favorable shift in the revenue mix, with higher-margin contract manufacturing and DaaS segments now contributing a combined 63% of total revenues, up from 46% in the previous year.

The company continues to leverage its asset-light, network-driven model, particularly in contract manufacturing, which contributed 53% of revenues and grew 84% YoY. Current utilization stands at 65-70% of its 9 million tons annual capacity. Arisinfra plans to add 2-3 million tons of annual capacity this year, primarily in the South Tamil Nadu region for stone aggregates, by recycling existing deposits rather than incurring new CapEx, aiming to reach approximately 11 million tons total capacity.

The DaaS business is gaining significant traction, contributing approximately 10% (INR 28 crores) to the top line in Q1 FY27. A new DaaS mandate worth INR 650 crores was secured from a leading developer in Mumbai, boosting the Gross Development Value (GDV) under execution to over INR 1,800 crores. Management clarified that DaaS is a capital-light, fee-based model (fixed fee, percentage on construction and sales) that does not expose the company to direct real estate risks or capital commitments, while yielding high EBITDA margins of 60-65%.

Arisinfra demonstrated strong operational efficiency, reducing net working capital days to 56 from 66 days as of March 2026. The company maintains a healthy balance sheet with a net debt-to-equity ratio of 0.02x. For the current fiscal year, net debt is projected to grow to INR 75-80 crores, while maintaining a conservative net debt-to-equity target of 0.5-0.6x to support its planned 35-40% annual growth without overleveraging.

The company's strategy involves focusing on regions with strong supply networks and high construction activity, primarily Maharashtra and Tamil Nadu, to maximize returns. Customer retention remains a key strength, with repeat orders improving to 82% from 78% in Q4 FY26. Management highlighted that its top 10 customers are well-diversified across multiple projects and regions, ensuring stable cash flows and reducing concentration risk.

The asphalt business showed strong momentum, with revenues increasing to INR 53 crores in Q1 FY27 from INR 30 crores in Q4 FY26, and the number of transacted customers rising from 28 to 38. Additionally, the merger of an associate company is in an advanced stage, with three out of four regulators having cleared it. While the final timeline depends on government procedures, the company is actively pushing for a quick resolution to streamline operations and eliminate minority interests.