Capacit'e Infraprojects Limited — Q1 FY26 earnings call

Call held 12 Aug 2025

Management summary

Capacit'e Infraprojects delivered a robust Q1 FY26 performance, overcoming seasonal challenges like early monsoon and Eid-related labor migration. The company maintained its FY26 revenue growth guidance of 20% CAGR and is confident in achieving its INR 4,000-4,500 crore order inflow target, supported by a strong order book exceeding INR 11,000 crores. Working capital management showed improvement, generating INR 54 crores in positive cash flow, and the company expects further reduction in its cost of debt.

Highlights

  • Robust Q1 FY26 performance despite temporary challenges, continuing momentum from FY25's record performance.

  • Management confident of achieving 20% CAGR revenue growth for FY26, with strong execution expected in H2.

  • Order book in excess of INR 11,000 crores (excluding MHADA) provides over 3 years of revenue visibility.

  • Working capital management improved, with Q1 collections of INR 543 crores against INR 599 crores revenue, leading to INR 54 crores positive cash flow.

  • Cost of debt is expected to decrease, with cash credit at 10.3% and high-interest NCDs of INR 61 crores expected to be removed by Q2/Q3 FY26.

Concerns

  • Q1 FY26 revenue was partially impacted by seasonal factors like early monsoon onset (end of May/June) and Eid festival related labor migration.

  • A previous auditor's comment questioned the recovery of INR 63.61 crores and INR 11.55 crores in trade receivables, though management states assets exceeding INR 100 crores cover this.

Key financials

  1. Revenue ₹599 Cr
  2. PAT Margin 7.5%

What they filed

Q1 FY27: revenue up 6.8%, net profit down 14.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue518 590 671 589 646 +25%675 +14%712 +6%629 +7%
EBITDA95 90 86 102 108 +14%108 +20%109 +27%99 −3%
Net profit45 52 53 47 51 +13%50 −4%45 −15%40 −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

₹11,000 Cr

as of 2025-08-12 quantified

Execution

3 years or more

Composition

Mix 2 client types
  • Private Sector 70%
  • Government Sector 30%

Share of order book by client type

Pipeline

other

Bid pipeline is very strong, allowing company to pick and choose projects.

The company has a strong order book providing multi-year visibility and is selectively bidding for new projects, focusing on quality clients and favorable payment terms.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹34.03 Cr this quarter · ₹75 Cr (FY26) planned
    The capex in the Q1 has been INR34.03 crores. And the full year, we look to this -- in the current financial year, go to approximately INR75 crores to INR80 crores.
  • Debt 0.1× EBITDA Cost 10.3%
    • Rate reset Cash credit interest rates have come down to 10.3%.
    • Repayment High-interest NCDs reduced from INR 100 crores to INR 61 crores, expected to be fully removed in Q2/Q3. ₹39 Cr
    The net debt to equity is the fund-based debt. Total debt profile also has bank guarantees. Banks want securities for nonfund-based limits like bank guarantee as well. And therefore, the promoters who basically started out as professionals in 2012, '13 have given a pledge of 50 lakh shares for project-specific limit of CIDCO to State Bank of India. Apart from there, there was a pledge of shares with Avendus, which has reduced by INR5 lakhs -- 10 lakh shares, I'm sorry. And we believe that this reduction will be much more aggressive over the next 2 quarters. We do believe that by the end of the current financial year, there will not be any pledge with any other entity except State Bank of India for the project-specific limit of CIDCO.
  • Liquidity Liquidity disclosed Generated INR 54 crores positive cash flow in Q1 FY26, with current collections at INR 756 crores, indicating improved liquidity.
    As I speak to you today, our collection is close to INR756 crores. So there is a substantial improvement in collection over the last financial year, where after a long time after adjustments, we generated INR54 crores positive cash flow, all right?

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 20%
    Of course, there's no doubt about it. So the quarter-1 generally should have been better by INR75 crores. We had severe monsoon starting in end of May, getting into June. While you know that in the last past 5 to 6 years, there's hardly been any monsoon during June month. So the last quarter was impacted. And therefore, you will have strong momentum in the current quarter also because it's not only shell and core business that we do, we do projects which are finishing and interior works are not hampered by monsoons as such. And therefore, we do believe that without an iota of doubt, the company will achieve its full year's guidance.

    — Rohit Katyal

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 16.5% to 17.5%
    Darshil, see, let me reiterated that our full year guidance remains at 16.5% to 17.5%.

    — Rohit Katyal

Order Inflow

  • Order Inflow Order Inflow · FY26 · High confidence INR4,000 crores to INR4,500 crores
    So we have already given a target for the current full year, which is about INR4,000 crores to INR4,500 crores.

    — Rohit Katyal

Capex

  • Capex Capex · FY26 · High confidence INR75 crores to INR80 crores
    The capex in the Q1 has been INR34.03 crores. And the full year, we look to this -- in the current financial year, go to approximately INR75 crores to INR80 crores.

    — Rohit Katyal

Revenue Contribution

  • CIDCO Revenue (remaining period) Revenue Contribution · FY26 · High confidence INR700 crores to INR800 crores
    we are committed to give more than INR700 crores to INR800 crores in CIDCO for the remaining period, all right?

    — Rohit Katyal

  • MHADA Subcontract Revenue Revenue Contribution · FY26 · High confidence INR350 crores
    We are committed to do about INR350 crores as a subcontract that is in the books of Capacit'e Infraprojects Limited in MHADA.

    — Rohit Katyal

  • NBCC Average Monthly Billing Revenue Contribution · from October onwards · High confidence INR60 crores
    And obviously, we have to go to an average billing cycle of INR60 crores from October onwards in NBCC.

    — Rohit Katyal

Client Mix

  • Private vs Government Ratio Client Mix · year-end · High confidence 70-30
    private sector, you will see a little bit of growth over the next 2 months which would normalize to 70-30 ratio over the year-end.

    — Rohit Katyal

Recoveries

  • Recoveries Target Recoveries · FY26 · High confidence INR65 crores
    No, the recoveries have not been recorded. The target is INR65 crores, out of which in the second quarter, the company has sold properties of INR19.1 crores, has entered into a settlement agreement for which demand draft is lying with the solicitor. So we believe that second quarter, there will be a recovery of slow-moving debtors and noncore assets totaling to approximately INR27 crores, INR27.5 crores, which would mean nearly for 35% to 40% of the full year target.

    — Rohit Katyal

Debt Management

  • Pledge Reduction Debt Management · by end of current financial year · High confidence No pledge except SBI
    And we do believe that by the end of the current financial year, there will not be any pledge with any other entity except State Bank of India for the project-specific limit of CIDCO.

    — Rohit Katyal

  • Average Interest Rate Debt Management · FY26 · High confidence <10%
    And the average interest should not be more than 10% for the company. And therefore, I gave a guidance that on an absolute basis, the total finance cost would be lower in the current financial year as opposed to last financial year.

    — Rohit Katyal

What to watch in Q2 FY26

NBCC Profit Recognition

Q2 FY26
Current Not yet recognized in Q1 FY26
Target Start recognizing profit from Q2 FY26

Why it matters

Indicates progress on a significant project and contributes to overall profitability.

As far as NBCC is concerned, we should start recognizing profit from quarter 2 onwards, that is the current quarter.

Risks & concerns

  • Labor Availability and Wage Inflation

    high

    Labor shortage is a significant, industry-wide issue for the past 2 years, impacting growth potential, though the company is 90-95% manned through innovative methods.

    Both acknowledged

  • Seasonal and Cyclical Factors

    medium

    Q1 FY26 performance was partially impacted by early monsoon onset (end of May/June) and Eid festival related labor migration.

    Management acknowledged

  • Recovery of Questioned Receivables

    medium

    Auditors noted INR 66 crores in receivables where recovery was questionable, but management asserts assets exceeding INR 100 crores are available to cover this.

    Analyst acknowledged

Q&A highlights

4 direct, 1 evasive
FY26 Revenue Growth Target and Q1 Impact Direct
Of course, there's no doubt about it. So the quarter-1 generally should have been better by INR75 crores. We had severe monsoon starting in end of May, getting into June... And therefore, you will have strong momentum in the current quarter also... we do believe that without an iota of doubt, the company will achieve its full year's guidance.

Analyst questioned the feasibility of 20% CAGR given Q1 challenges, and management reaffirmed confidence, attributing Q1 softness to temporary seasonal factors.

Asked by Darshil Jhaveri

Deferred Profit Recognition and Accounting Policy Change Partial
Signature Global is in 2 phases. So Phase 1 under execution, we have started recognizing profit because the threshold has been crossed. As far as NBCC is concerned, we should start recognizing profit from quarter 2 onwards, that is the current quarter. ... I will request our IR agency to reply to your question by mail, sir.

Analyst sought clarification on the recognition of INR 12 crores deferred profit from previous quarters, with management providing a partial answer and deferring detailed breakdown.

Asked by Vansh Solanki

Outlook on Data Centers Segment Direct
Yes, we are seeing a very huge traction both in data centers, in private, more so, government as well and also in the private building space... The last project which we bid has been recalled, and we are a qualified contender in that, and so we will be reparticipating in that project.

Analyst inquired about the company's strategy and opportunities in the growing data center market, with management confirming strong traction and re-bidding for a key project.

Asked by Shivom Revankar

Recoveries from Slow-Moving Debtors and Non-Core Assets Direct
No, the recoveries have not been recorded. The target is INR65 crores, out of which in the second quarter, the company has sold properties of INR19.1 crores, has entered into a settlement agreement for which demand draft is lying with the solicitor. So we believe that second quarter, there will be a recovery of slow-moving debtors and noncore assets totaling to approximately INR27 crores, INR27.5 crores, which would mean nearly for 35% to 40% of the full year target.

Analyst asked about the progress on recovery targets, and management clarified that Q1 saw no recoveries but provided specific targets and expected contributions for Q2.

Asked by Pradyumna Laddha

Consistency of Guidance and Past Performance Evasive
I'm sorry, sir, I don't agree with that. We guided for INR2,250 crores. We did INR2,400 crores last year. I have maintained that quarter-on-quarter should not be compared for a construction company. Whatever full year guidance from EBITDA, PAT, cash PAT, top line was given has been achieved. All right?

Analyst challenged management on perceived inconsistencies in meeting guidance and recurring excuses for underperformance, to which management reiterated focus on full-year targets and disagreed with the premise.

Asked by Tejas Khandelwal

High Pledge Percentage Despite Low Net Debt/Equity Direct
The net debt to equity is the fund-based debt. Total debt profile also has bank guarantees. Banks want securities for nonfund-based limits like bank guarantee as well. And therefore, the promoters who basically started out as professionals in 2012, '13 have given a pledge of 50 lakh shares for project-specific limit of CIDCO to State Bank of India. ... And we do believe that this reduction will be much more aggressive over the next 2 quarters. We do believe that by the end of the current financial year, there will not be any pledge with any other entity except State Bank of India for the project-specific limit of CIDCO.

Analyst questioned the high promoter pledge despite a healthy balance sheet, and management explained it's for project-specific bank guarantees and expects significant reduction by year-end.

Asked by Harshil Kothari

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance and Seasonal Impacts

Capacit'e Infraprojects reported a robust Q1 FY26 performance, continuing the momentum from a transformational FY25. Despite this, the quarter's revenue of INR 599 crores was partially impacted by seasonal factors, including the early onset of monsoon in late May/June and Eid-related labor migration. Management noted that Q1 revenue could have been INR 75 crores higher without these temporary challenges, but expressed confidence in achieving the full year's guidance.

Strategic Project Portfolio and Execution Outlook

The company's strategy of optimizing its project portfolio has led to an increase in average project size and revenue contribution per project, improving operational efficiency. Execution is expected to ramp up significantly in the second half of FY26, particularly after the monsoon season. Key projects like CIDCO are expected to contribute INR 700-800 crores, MHADA INR 350 crores (subcontract), and NBCC is projected to achieve an average billing of INR 60 crores per month from October onwards.

Order Book and Bidding Pipeline

Capacit'e Infraprojects boasts a strong order book exceeding INR 11,000 crores (excluding MHADA), providing over 3 years of revenue visibility. The company has set an ambitious order inflow target of INR 4,000-4,500 crores for FY26, with management noting a very strong bidding pipeline. The focus remains on selecting quality clients and projects with favorable payment terms, a lesson learned from past challenges like the NBFC crisis.

Working Capital and Collections Management

Working capital management showed significant improvement in Q1 FY26. The company generated INR 54 crores in positive cash flow, with collections of INR 543 crores against a revenue of INR 599 crores. Current collections stand at INR 756 crores, reflecting a substantial improvement over the last financial year. Management highlighted that working capital days (excluding retention) did not increase in Q1.

Capital Expenditure and Debt Profile

Capital expenditure for Q1 FY26 was INR 34.03 crores, with a full-year target of INR 75-80 crores. The company is actively managing its debt profile; cash credit interest rates have come down to 10.3%. High-interest non-convertible debentures (NCDs) have been reduced from INR 100 crores to INR 61 crores and are expected to be fully removed from the balance sheet by Q2/Q3 FY26, aiming for an average interest rate below 10% for the company. Promoter pledges are also expected to be significantly reduced by year-end, with only the SBI project-specific pledge for CIDCO remaining.

Labor Management and Productivity Initiatives

Labor availability remains a significant, industry-wide challenge that has persisted for the past two years, impacting the potential for even higher growth. Capacit'e Infraprojects has addressed this by ensuring 90-95% manning across projects through innovative recruiting and improved work conditions. The company utilizes its eFORCE application to track 'boots on ground,' output, and productivity per workman, providing detailed information to operations teams to enhance efficiency.

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