Capital Infra — Q4 FY26 earnings call

Call held 20 May 2026

Management summary

Capital Infra Trust reported a strong Q4 FY26, driven by new acquisitions, timely annuity receipts, and debt refinancing, leading to an improved net debt ratio of 40.9% and NAV of INR 74.7 per unit. The Trust declared a DPU of INR 2.4 per unit for Q4 FY26 and provided FY27 DPU guidance of INR 9-9.25, representing a cash yield of 13-13.5%. Management outlined plans for acquisition-led growth to reach INR 10,000 crores AUM by FY27, primarily through its ROFO pipeline and third-party assets, while focusing on maintaining a stable DPU and optimizing debt.

Highlights

  • Strong performance in Q4 FY26 with DPU of INR 2.4 per unit.

  • Net debt ratio improved to 40.9% and NAV increased to INR 74.7 per unit from INR 72.3.

  • Refinanced INR 2,000 crores of external borrowings at a lower cost of 6.85%, reducing effective annualized interest rate to 7.24%.

  • Acquired 3 SPVs, adding INR 2,570 crores enterprise value at a 9.3% discount to intrinsic value.

  • Received INR 407 crores in annuities, INR 112 crores from NHAI change in law claim, and INR 66 crores from sponsor indemnity payments.

Concerns

  • Past DPU volatility acknowledged by management, though they claim stability going forward.

  • Potential for NAV dilution if future fundraising occurs at a lower valuation, though management aims to minimize this.

  • Quarterly variation in DPU composition (interest, dividend, capital repayment) can be volatile, impacting taxability for unitholders.

Key financials

6 periods

Headline

  • Net Debt Ratio
    40.9%
  • NAV per unit
    ₹74.7
  • Effective Annualized Interest Rate
    7.2%

Q4 Consolidated

  • Total Income
    ₹345 Cr
    QoQ +89.6%
  • EBITDA
    ₹282 Cr
  • Net Profit
    ₹195 Cr

Q4 FY26

  • DPU
    ₹2.4

Q4 Standalone

  • Total Income
    ₹259 Cr
    QoQ +100.8%
  • EBITDA
    ₹257 Cr
  • Net Profit
    ₹253 Cr

FY26

  • AUM
    ₹6,611 Cr
    YoY +42%
  • DPU
    ₹11.6

FY26 Standalone

  • Total Income
    ₹790 Cr
  • EBITDA
    ₹784 Cr
  • PAT
    ₹285 Cr

What they filed

Q1 FY27: revenue up 37.0%, net profit up 270.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue159 189 179 178 283 +78%259 +37%
EBITDA-3 -81 127 44 220 +7433%145 +279%
Net profit-37 -74 78 11 195 +627%126 +270%
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

₹6,611 Cr

as of 2026-03-31 quantified

42% YoY

Inflow this quarter

₹2,570 Cr

Pipeline

qualified rfp

Sponsor's ROFO pipeline pool increased to 17 assets; 8 assets at advanced stages for acquisition by Q3 FY27 with collective BPC of INR 7,100 crores. Targeting 4-5 acquisitions from these 8.

The Trust has a strong ROFO pipeline from its sponsor and is also pursuing selective third-party acquisitions to achieve its AUM target.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹170 Cr SEBI permits InvITs to avail debt for major maintenance
    • Major maintenance for one asset ₹170 Cr
    For FY27, we have major maintenance target of INR 170 crores. ... So recently, even SEBI has revised the rules, and they have now permitted InvITs to avail debt to fund major maintenance.
  • Debt Gross ₹2,900 Cr Cost 7.2%
    • Refinance Refinanced external borrowings at 6.85% ₹2,000 Cr
    • New borrowing Raised fresh term debt at 6.85% per annum ₹1,750 Cr
    • Repayment Debt repayment from internal accruals ₹108 Cr
    • Repayment Redemption of dissenting NCD holders ₹650 Cr
    • Rate reset NCD coupon rate revised downward from 7.6% to 6.85% per annum, effective March 5, 2026
    net debt ratio of 40.9%. ... our effective annualized interest rate was 7.33%, which has further reduced to 7.24% currently. ... we have approximately INR 2,900 crores of debt. ... our debt leverage is limited to 49%. ... post the June distribution, we would be eligible to enhance it to 70%. ... We would target somewhere around 57.5 to 60.
  • Dividend ₹0.63/share (interim)
    the board has approved a distribution of INR 2.40 per unit for Q4 FY26... The form of distribution is INR 0.99 per unit as interest, INR0.63 per unit as dividend, INR 0.77 per unit as capital repayment, and INR 0.01 per unit as other income. The record date for the said distribution is May 22, 2026.
  • M&A 3 HAM assets Acquisition · Closed · Consideration ₹[object Object] (undisclosed)

    Portfolio expansion, added INR 2,570 crores of enterprise value at a 9.3% discount to intrinsic value

    Increased portfolio to 12 operational HAM assets, improved NAV

    acquisition of 3 HAM assets added INR 2,570 crores of enterprise value at a 9.3% discount to intrinsic value, and increased our portfolio to 12 operational HAM assets.
  • Liquidity Liquidity disclosed Received INR 407 crores from 8 annuities, INR 112 crores from NHAI change in law claim, and INR 66 crores from sponsor indemnity payments. These are one-time inflows.
    timely receipt of eight annuities aggregating to INR 407 crores, additional inflow of INR 112 crores as change in law claim from NHAI, stable routine operations of 12 projects, lowered cost of debt by refinancing external borrowings of INR 2,000 crores at 6.85%, and receipt of around INR 66 crores from the sponsor towards indemnity payments.

Guidance & targets

AUM

  • Total AUM AUM · FY27 · High confidence INR 10,000 crores
    our trajectory towards the INR 10,000 crores AUM target in FY27.

    — Hare Krishna

Dividend

  • DPU Dividend · FY27 · High confidence INR 9 to INR 9.25 per unit
    For FY27, we are providing DPU guidance of INR 9 to INR 9.25 per unit

    — Hare Krishna

  • DPU Growth Dividend · FY28 · High confidence at least 10%
    this is again going to increase by at least 10% in FY28

    — Hare Krishna

  • Non-taxable DPU portion Dividend · FY27 · High confidence 25% to 30%

    Previously 40% → 25% to 30%

    For FY27, this would be somewhere in the range of 25% to 30%, primarily driven by the return of capital.

    — Hare Krishna

Cash Yield

  • Cash Yield Cash Yield · FY27 · High confidence 13% to 13.5%
    translating to an expected cash yield of 13% to 13.5% based on the March 26 price.

    — Hare Krishna

Debt

  • Debt Leverage Debt · post-June distribution · High confidence 57.5%-60%

    Previously 49% → 57.5%-60%

    We would target somewhere around 57.5 to 60 because it would be a range given the nature of the asset class.

    — Hare Krishna

Acquisition

  • Project-level IRR for acquisitions Acquisition · future acquisitions · High confidence around 12%
    we would be targeting IRRs of around 12% for future acquisitions.

    — Hare Krishna

Capex

  • Major Maintenance Capex · FY27 · High confidence INR 170 crores
    for example, for FY27, our major maintenance is INR 170 crores.

    — Hare Krishna

  • Major Maintenance Capex · FY28 · High confidence INR 90 crores
    In FY28, it's around INR 90 crores

    — Hare Krishna

  • Major Maintenance Capex · FY29 · High confidence INR 100 crores
    FY'29, it's INR 100 crores

    — Hare Krishna

  • Major Maintenance Capex · FY30 · High confidence INR 140 crores
    and FY30 around INR 140 crores.

    — Hare Krishna

What to watch in Q1 FY27

Acquisition completion of ROFO assets

Q3 FY27
Current 8 assets at advanced stages
Target Acquisition completion for 4-5 assets

Why it matters

Key driver for AUM growth and future DPU.

Looking ahead to FY27, we have strong visibility through our sponsor-backed ROFO pipeline with eight assets at advanced stages, and we are targeting acquisition completion around Q3 FY27

Risks & concerns

  • NAV dilution from equity fundraising at lower valuations

    medium

    Management is cognizant of the market trading at a discount to NAV and its impact on dilution, aiming to minimize this by funding acquisitions through debt in FY27.

    Analyst acknowledged

  • Volatility in DPU composition (taxability)

    low

    The mix of interest, dividend, and capital repayment in DPU can vary quarterly, affecting unitholder tax implications, though overall FY non-taxable portion is expected to be stable (25-30% for FY27).

    Analyst acknowledged

  • Impact of rising interest rates

    low

    InvIT's revenue streams are linked to bank rates, providing a natural hedge against increased cost of debt, as increased revenues would offset higher debt costs.

    Analyst downplayed

Q&A highlights

8 direct
DPU volatility and future stability Direct
our operations are pretty much stabilized right now, and now we have quite predictable cash flows ahead of us. ... Even if you look at, right now for the next financial year, we are having 9.2, which translates 9 to 9.25 guidance which we have given which translates, quarterly basis to 2.3. This quarter we have given 2.4. So therefore, I would suggest it's a similar range.

Addresses a key investor concern about past DPU fluctuations and provides assurance of future stability and predictability.

Asked by Sarvesh Gupta

NAV dilution and fundraising strategy Direct
Going forward, at least for FY27, we are cognizant of this aspect. When we are funding the future acquisitions through debt, therefore there is no additional unit being issued, and therefore, it is accretive to both the unitholder, existing unitholders and the NAV growth as well... If there is any dilutive impact then we will not go for equity raise at all.

Clarifies management's commitment to avoid NAV dilution and outlines their preference for debt-funded acquisitions in the near term.

Asked by Sarvesh Gupta

Third-party acquisition market and valuations Direct
I think a third-party asset is always challenging, not only you need to look at the financials; you need to look at the quality as well... we also have a strong ecosystem among road players and we have identified a few players. We are in discussions with them.

Provides insight into the competitive landscape for acquisitions and management's approach to sourcing and evaluating third-party assets.

Asked by Sarvesh Gupta

O&M contracts and cost stability Direct
our framework is beneficial for the InvIT. For operations and maintenance, we have given a fixed-price contract to our project manager. Therefore, despite the volatility in bitumen prices or commodities or vehicular movement, which is going on right now, our cost does not get impacted at all. Our cost remains the same, which is fixed as of today. ... even the O&M contracts, the value has been finalized for the entire tenure of the concession agreement.

Highlights a key aspect of the business model that provides cost stability and protects margins from inflationary pressures.

Asked by Dishant Garg

Value of ROFO pipeline assets Direct
the gross BPC for these 8 projects adds up to INR 7,100 crores. And in BPC essentially what happens is that at least 40% of the amount has already been received by the developer from NHAI, so only 60% of the value remains and this further increases based on the inflation index.

Gives a concrete estimate of the potential value of the near-term acquisition pipeline and explains the calculation methodology.

Asked by Ankit Tripathi

Stability of DPU from current assets over 2-3 years Direct
Yes, absolutely. If you look at slide 24 of the investor presentation, in the guidance we have also categorized the annual inflows which we are looking at. Even in the current guidance, we are assuming some reserve as well, which is essentially, if we are to repay any debt, any major maintenance, which we have to budget for. Therefore, we are quite confident of achieving this guidance for FY27 based on the cash flows of the projects.

Reassures investors about the sustainability of the DPU guidance based on existing assets and prudent reserve management.

Asked by Ankit Tripathi

Interest rate sensitivity and impact on cash flow/NAV Direct
Because all our assets are annuity based. Therefore, in all of the 12 assets, we leave interest along with the annuity receipts, which is linked to the bank rate. If the interest rates are to go up, my revenue for all the 12 projects will increase substantially, will increase, linked to the changes in the bank rate in future. And my cost of debt is, because my average is only, say, 41% right now. Therefore, my cost of debt is less compared to the revenue which I would be receiving in a financial year. Therefore, in any financial year with movement in the interest rate, we are always going to benefit than losing it out.

Explains the natural hedge mechanism of the InvIT's business model against rising interest rates, which is a key risk factor for many debt-heavy businesses.

Asked by Manoj Bagadia

Focus on road sector and annuity assets Direct
we do not intend to move out of the road sector and step in power sector right now, as of now, we want to continue to focus on the road sector itself. And even in toll versus annuity assets, in the near term, our objective is to continue with the annuity assets.

Clarifies the company's strategic focus on its core expertise, providing clarity on future asset acquisition strategy and risk profile.

Asked by Anant Mundra

3 min read 7 chapters

Detailed narrative

Strong Q4 & FY26 Performance Driven by Acquisitions and Debt Optimization

Capital Infra Trust delivered a robust Q4 FY26, reporting a standalone total income of INR 259 crores and consolidated total income of INR 345 crores. For the full fiscal year, AUM grew by 42% year-on-year to INR 6,611 crores, driven by the acquisition of 3 HAM assets that added INR 2,570 crores in enterprise value. The Trust achieved a DPU of INR 2.4 per unit for Q4 FY26, contributing to a total FY26 DPU of INR 11.6 per unit, alongside an improved net debt ratio of 40.9% and NAV of INR 74.7 per unit.

Strategic Debt Refinancing and Cost Reduction

The company actively managed its debt profile by refinancing INR 2,000 crores of external borrowings at a competitive rate of 6.85%, which helped reduce the effective annualized interest rate to 7.24%. This strategic move, combined with INR 108 crores of debt repayment from internal accruals and INR 650 crores for NCD redemption, enhanced cash flow efficiency and optimized the debt structure. The coupon rate on one series of NCDs was also revised downward from 7.6% to 6.85%.

Ambitious Acquisition-Led Growth Targets

Capital Infra aims to significantly expand its AUM to INR 10,000 crores by FY27, primarily through its sponsor's ROFO pipeline. This pipeline currently includes 17 assets, with 8 at advanced stages for acquisition by Q3 FY27, representing a collective BPC of INR 7,100 crores. The Trust plans to acquire 4-5 of these assets and is also actively pursuing selective third-party acquisitions, targeting project-level IRRs of around 12%.

Predictable Distributions and NAV Stability Commitment

Management provided a DPU guidance of INR 9 to INR 9.25 per unit for FY27, translating to an expected cash yield of 13-13.5%. They anticipate DPU to increase by at least 10% in FY28. The Trust emphasized its commitment to minimizing equity dilution for future acquisitions, preferring debt funding to maintain NAV growth and ensure that acquisitions are accretive to existing unitholders.

Robust O&M Cost Structure and Interest Rate Hedge

The InvIT's business model benefits from fixed-price O&M contracts, which insulate it from inflationary pressures on raw materials like bitumen and other operational costs. A key advantage is the natural hedge against rising interest rates: the annuity-based revenue streams are linked to bank rates, ensuring that an increase in the cost of debt is offset by a corresponding increase in revenues, thereby protecting net inflows.

Planned Major Maintenance and Financial Flexibility

The Trust has a clear and staggered plan for major maintenance, with INR 170 crores allocated for FY27, followed by INR 90 crores in FY28, INR 100 crores in FY29, and INR 140 crores in FY30. This structured approach, combined with SEBI's recent permission for InvITs to use debt for major maintenance, ensures financial flexibility and consistent distributable cash flows without significant single-year impact.

Strategic Focus on Road Sector and Annuity Assets

Capital Infra Trust reiterated its strategic focus on the road sector, specifically on annuity-based assets. The management stated that they do not intend to diversify into other sectors like power or acquire toll assets in the near term. This focused approach leverages the Trust's core expertise, maintains a risk-averse profile, and ensures predictable revenue streams.

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