Cube Highways — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Cube Highways Trust reported a strong Q3 FY26, marked by robust operational performance with significant growth in revenue and EBITDA. The Trust declared a distribution of ₹4.10 per unit, bringing the YTD total to ₹10.20. Strategically, the Board approved the acquisition of four new assets and initiated steps towards converting the Trust into a publicly listed entity, aiming to enhance liquidity and capital access.

Highlights

  • Revenue from operations for 9 months grew 25% YoY to ₹3,077 crores, demonstrating strong performance.

  • EBITDA for the 9 months rose 27.64% YoY to ₹2,306 crores, reflecting improved profitability.

  • Q3 FY26 distribution declared at ₹4.10 per unit, contributing to a healthy YTD distribution of ₹10.20 per unit.

  • Traffic growth of 9.4% YoY and toll revenue growth of 12.1% YoY indicate robust operational momentum.

  • Strategic acquisition of four additional assets with an enterprise value over ₹7,200 crore enhances portfolio and future growth prospects.

Key financials

3 periods

Headline

  • AUM
    ₹36,093 Cr
  • NAV
    ₹142.7
  • Net Debt
    ₹17,900 Cr
  • Net Debt to AUM
    0.469
  • YTD DPU
    ₹10.2

Q3

  • DPU
    ₹4.1

9M

  • Revenue from Operations
    ₹3,077 Cr
    YoY +25%
  • Total Consolidated Income
    ₹3,170 Cr
  • EBITDA
    ₹2,306 Cr
    YoY +27.6%

What they filed

Q1 FY27: revenue down 1.6%, net profit down 16.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue521 510 505 680 622 +19%776 +52%833 +65%669 −2%
EBITDA510 498 501 665 603 +18%613 +23%893 +78%622 −6%
Net profit237 226 219 349 252 +6%265 +17%557 +154%290 −17%
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.

Capital allocation

high confidence
  • Debt Net ₹17,900 Cr
    Our balance sheet remains robust. Net debt to AUM stands at 46.86%, with AUM stable at 36,093 crore and NAV at ₹142.7 per unit.
  • Dividend ₹4.1/share (interim)
    The distribution of ₹551 crores, i.e., 4.10 per unit, during the quarter comprises 2 per unit as interest, ₹1.33 per unit as a return of capital, and ₹0.77 per unit as a dividend.
  • M&A BFHL, WMTPL, DTPL (from CH-V) and CNTL (from CH-II) Acquisition · Announced · AUM ₹7,200 Cr

    Acquisition brings a balanced mix of three toll assets and one annuity asset, adding ~INR 7,200 crores in AUM and providing NAV accretion of roughly INR 3 per unit for existing unitholders.

    NAV accretion of roughly INR 3 per unit for existing unitholders, proposed at a discount of approximately 5.9% to 7.9% to the fair market value assessed by EY.

    Cube Highways Trust proposes to acquire four fully operational assets—three toll assets, namely (1) BFHL... (2) WMTPL... and (3) DTPL... from CH-V, along with one annuity asset, (4) CNTL... from CH-II.
  • Liquidity Liquidity disclosed Liquidity remained strong, with adequate headroom to fund future acquisitions.
    Liquidity remained strong, with Net Debt at 179 Bn and the Net Debt/EV ratio at 46.86%, leaving adequate headroom to fund future acquisitions.

Guidance & targets

Distributions

  • Distribution performance Distributions · next financial year · Medium confidence continue broadly in line with the trend observed over the past three years
    While we do not formally provide DPU guidance, based on the underlying performance of the existing portfolio, the addition of new assets, and the strength of the acquisition pipeline, we believe the distribution performance should continue broadly in line with the trend observed over the past three years.

    — Vinay C Sekar

Asset Acquisitions

  • Contribution of announced acquisitions to distributions Asset Acquisitions · next financial year · High confidence expected to contribute to distributions
    The four announced acquisitions are expected to contribute to distributions in the next financial year.

    — Vinay C Sekar

What to watch in Q4 FY26

Finalized WPI numbers and valuation model update

March (annual review)
Current WPI numbers provisional, model assumes 2.4%
Target Finalized WPI numbers incorporated into valuation model

Why it matters

WPI is a key input for asset valuation and future revenue projections, impacting NAV.

At this stage, the WPI numbers announced are provisional. The two data points relevant to our assets are the December and April WPI numbers, and we expect the final numbers for both in due course. Once these are finalised, we will update our valuation model accordingly.

Risks & concerns

  • Forward-looking statements subject to risks and uncertainties

    low

    Statements are not guarantees of future performance and may differ materially from actual results.

    Management acknowledged

Q&A highlights

3 direct
Acquisition of assets from other infrastructure sectors Direct
Currently, we have a strong and visible pipeline within the road sector itself. We are acquiring four road assets and have signed ROFO arrangements for three additional assets, reinforcing our confidence in the opportunity available in the roads space. That said, as an InvIT and as an infrastructure asset manager, we believe that the capabilities and learnings we have developed in the road sector can be extended to other infrastructure sectors as well.

Clarifies the company's primary focus on the road sector while indicating potential future diversification into other infrastructure sectors if attractive opportunities arise.

Asked by Saurabh Dugar

Impact of low WPI numbers on valuation model Direct
At this stage, the WPI numbers announced are provisional. The two data points relevant to our assets are the December and April WPI numbers, and we expect the final numbers for both in due course. Once these are finalised, we will update our valuation model accordingly. I would also highlight that traffic performance, which is linked to GDP growth, has been stronger than we had anticipated.

Addresses a key input to the valuation model and explains the process for incorporating updated WPI figures, also noting stronger traffic performance as a counterbalancing factor.

Asked by Gautam Babu

Outlook for asset additions in FY27 and distribution trajectory Direct
We have announced the acquisition of four assets, subject to unitholder approval and statutory and regulatory clearances. These acquisitions are expected to be completed in FY27. In addition, as mentioned earlier, we have ROFO arrangements in place for three more assets, which we will evaluate for potential acquisition thereafter. ...we believe the distribution performance should continue broadly in line with the trend observed over the past three years.

Provides clarity on the timeline for new asset contributions to distributions and reiterates the expected consistency of distribution performance.

Asked by Chetan Wadia

2 min read 5 chapters

Detailed narrative

Strong Operational Performance and Financial Stability

Cube InvIT demonstrated robust operational performance in Q3 FY26, with a 9.4% YoY traffic growth and 12.1% YoY toll revenue growth. This led to a 27.64% increase in EBITDA for the nine months ended December 31, 2025, reaching ₹2,306 crores. The Trust's balance sheet remains strong, with AUM stable at ₹36,093 crore and NAV at ₹142.7 per unit, supported by a healthy Net Debt to AUM ratio of 46.86%.

Consistent Unitholder Distributions

The Trust declared a distribution of ₹4.10 per unit for Q3 FY26, bringing the year-to-date distribution to ₹10.20 per unit. Since listing, Cube InvIT has delivered cumulative distributions of ₹31.29 per unit, reflecting consistent value creation for unitholders. The Q3 distribution of ₹551 crores was composed of ₹2 per unit as interest, ₹1.33 per unit as return of capital, and ₹0.77 per unit as a dividend.

Strategic Asset Acquisitions and Growth Pipeline

The Board approved the acquisition of four additional assets from the sponsor group, including three BOT toll assets and one annuity asset, with an enterprise value exceeding ₹7,200 crore. These acquisitions are projected to add approximately ₹7,200 crores to the InvIT's AUM and are expected to contribute to distributions in the next financial year (FY27). Furthermore, ROFO arrangements are in place for three additional toll assets, ensuring a visible pipeline for future growth.

Conversion to Public InvIT

Cube Highways Trust is actively pursuing conversion from a private to a publicly listed InvIT. This strategic move aims to provide access to deeper and more diverse capital pools, enhance liquidity for investors, and potentially reduce the overall cost of capital. The Trust has already adopted most governance and disclosure practices applicable to public InvITs, facilitating a smooth transition.

Valuation Model and WPI Impact

Management addressed concerns regarding the impact of sustained low WPI numbers on the valuation model, which currently assumes 2.4% WPI. They clarified that WPI numbers are provisional and will be incorporated into the annual valuation model review scheduled for March. Additionally, stronger-than-anticipated traffic performance, linked to GDP growth, is expected to be factored into the model.

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