Capacit'e Infra.

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.

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.

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 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 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 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.