ARIS

Arisinfra Solutions reported a robust Q2 FY26, with revenue from operations growing 38% YoY to INR241 crores. EBITDA stood at INR23 crores, achieving a 9.34% margin. Notably, the company turned profitable with a PAT of INR15 crores, compared to a loss of INR2 crores in the prior year. For H1 FY26, revenue reached INR453 crores (up 24% YoY), with EBITDA at INR42 crores (up from INR32 crores) and a PAT of INR20 crores (up from INR4 crores), reflecting a 50 bps EBITDA margin expansion to 9.25%.

The company significantly improved its working capital cycle, reducing it to 84 days from 114 days, supported by disciplined collection and supply chain financing. Debtor days also decreased from 135 to 122 days. Management emphasized that this improved liquidity position, coupled with reduced consolidated borrowings from INR336 crores to INR52 crores, allows for sustained growth without reliance on short-term borrowings and positions the company as 'almost a zero-debt company'.

Arisinfra's integrated model, combining contract manufacturing, materials business, and real estate services, is driving growth. The company secured INR850 crores in integrated supply and services orders, providing 24-30 months of revenue visibility. Key projects include the INR250 crores Merusri Sunscape and INR200 crores Arsh Greens Villa. The asset-light model leverages trade deposits (INR170-180 crores) to reserve capacity across 15 partner plants, avoiding traditional capex of INR600-700 crores.

The company invests INR9-10 crores annually, or approximately 1% of its revenue, in technology. This investment is crucial for managing back-office operations, including vendor management, deal closures, and invoice processing, reducing dependency on headcount. Technology also enhances credit management, provides real-time data access, and improves overall efficiency, contributing to the reduction in working capital days and better quality of receivables.

The business mix is shifting towards higher-margin segments. Contract Manufacturing now contributes 42% (up from 36% YoY) with 9-9.5% EBITDA margins, while Services contribute 8% (up from 5% YoY) with 50% EBITDA margins. B2B supply, without contract manufacturing, yields 2.75-3% EBITDA margins. Management aims to further increase Contract Manufacturing's contribution to 55-60% and Services to 10-11%, which are key levers for achieving double-digit EBITDA margins.

The company is experiencing strong growth in the South, particularly Chennai, where most of its reserve capacity is located, expanding from 3.5-4 million metric tons to 9.5 million metric tons annually. While current utilization is just over 40%, there is significant headroom to reach over 90% utilization in 12-18 months. The company is also exploring opportunities in the northern region for exclusive tie-ups, leveraging the strong infrastructure and real estate growth in India.