Dhruv Consultancy Services Limited — Q3 FY26 earnings call

Call held 2 Mar 2026

Management summary

Dhruv Consultancy Services Limited reported a 9-month FY26 revenue of INR35.36 crores, impacted by a non-cash accounting adjustment of INR30 crores related to revised project cost and margin estimates. Despite this, the company achieved a significant milestone by entering the aviation sector and secured new mandates, maintaining a robust unexecuted order book of INR256 crores. Management emphasized strengthened governance and a conservative approach to revenue recognition going forward, with expectations of improved operational cash flows and no further accounting adjustments.

Highlights

  • Achieved a significant milestone by entering the aviation sector in Q3 FY26 with a project for link taxiways at MIHAN Nagpur.

  • Secured new orders including four DPR projects from NHAI and multiple supervision contracts, reflecting strong order momentum and geographical diversification.

  • Unexecuted order book of INR256 crores provides healthy revenue visibility for coming quarters, with potential to reach INR300 crores next quarter.

  • Management committed to no further accounting adjustments in the future, having strengthened internal control systems and adopting a conservative approach.

  • Company is well-positioned to benefit from government focus on infrastructure development, with a 20-25% strike rate on Indian projects.

Concerns

  • 9-month FY26 revenue and profitability dipped due to a prospective non-cash accounting adjustment of approximately INR30 crores.

  • Analyst noted a credit rating downgrade, which management attributed to a limited review based on publicly available information and requested reconsideration.

  • Operational cash flows have been historically negative, attributed to industry nature and competition, though management expects significant improvement this year.

  • Corporate governance concerns were raised by an analyst regarding past issues and the recent accounting adjustments.

Key financials

  1. 9-month FY26 Revenue ₹35.36 Cr
  2. Accounting Adjustment Impact ₹30 Cr
  3. Unexecuted Order Book ₹256 Cr
  4. Total Order Book (Post-Adjustment) ₹465 Cr
  5. Total Order Book (Pre-Adjustment) ₹490 Cr

What they filed

Q1 FY27: revenue down 26.1%, net profit down 397.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue33 22 28 21 19 −41%-6 −126%8 −70%16 −26%
EBITDA4 4 4 3 2 −47%-29 −854%-9 −301%-4 −213%
Net profit2 2 2 2 1 −47%-31 −1542%-0 −103%-5 −397%
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 Debt disclosed
    We have INR10 crores limit from HDFC which is short-term plus long-term CC. Second, we have INR4.5 crores limit from PNB also which is a CC again.
  • Liquidity Cash ₹70 Cr
    our cash flow itself is around INR70 crores-INR75 crores till date, which is there.

Guidance & targets

Sectoral Diversification

  • Aviation segment revenue contribution Sectoral Diversification · Medium confidence 10-20%
    In terms of revenue it will contribute still to 10 to 20% because the reach that highways give, any other sector will not be able to give.

    — Tanvi Auti

Order Book Execution

  • Unexecuted order book realization timeline Order Book Execution · High confidence 2.5-3 years
    We are expecting 2.5 to 3 years.

    — Tanvi Auti

Order Book Growth

  • Total order book target Order Book Growth · by 2030 · Medium confidence INR1,000 crores
    if we are confident that we might improve our strike rate, then yes by 2030 this is achievable.

    — Tanvi Auti

  • Unexecuted order book amount Order Book Growth · next quarter · Medium confidence INR300 crores
    this INR256 crores might become 300 in the next quarter as we are continuously bidding large-size assignments

    — Tanvi Auti

Order Acquisition

  • Strike rate on Indian projects Order Acquisition · High confidence 20-25%
    Our strike rate at present is 20% to 25% when it comes to Indian projects.

    — Tanvi Auti

Accounting Practices

  • Future accounting adjustments Accounting Practices · henceforth · High confidence No such adjustments
    henceforth for the future there will be no such revisions.

    — Tanvi Auti

What to watch in Q4 FY26

Detailed Q4 financials, especially 'other assets' breakdown.

Next quarter (Q4 FY26 results).
Current INR63 crores (other assets as of September), INR100 crores (net worth components).
Target Comprehensive breakdown and clarity on components.

Why it matters

Essential for investor understanding of balance sheet composition and liquidity, as requested by multiple analysts.

Yes, so Q4 it will be there because we get a very short time to review this... But Q4 we will be giving a detailed schedule

Risks & concerns

  • Non-cash accounting adjustment impacting reported revenue and profitability.

    high

    A prospective accounting adjustment of INR30 crores led to a dip in 9-month FY26 revenue and profitability, explained as a one-time refinement of estimates under Ind AS 8.

    Management acknowledged

  • Corporate governance perception due to past issues and recent accounting changes.

    high

    Analyst raised concerns about corporate governance given past debarment issues and the recent accounting adjustment, prompting management to detail corrective actions and commitment to strengthening governance.

    Analyst acknowledged

  • Credit rating downgrade.

    medium

    Analyst noted a credit rating downgrade, which management attributed to a limited review based on 9-month results and requested reconsideration in Q4.

    Analyst downplayed

  • Historically negative operational cash flows.

    medium

    Analyst pointed out consistently negative operational cash flows, which management explained as partly due to industry nature and competition, with a forecast for improvement this year.

    Analyst acknowledged

  • Geopolitical instability affecting international projects.

    medium

    Slowdowns in Africa and Middle East due to 'war situation and everything' and 'instability' in 2025, though no orders were cancelled.

    Management acknowledged

Q&A highlights

7 direct
Explanation of the INR30 crore accounting reversal and its impact on financials. Direct
So as said in the opening remarks also that this reported loss is primarily due to change in accounting estimates. So we follow an Ind AS accounting standard and as per the Ind AS 8, any change in estimate that is done has to be debited to the P&L.

This was the primary driver of the reported dip in profitability and a major point of concern for analysts, requiring detailed clarification from management.

Asked by Saket Kapoor

Funding of expenses despite the reported dip in revenue due to the accounting adjustment. Direct
This is not a -- it is not an accounting loss -- this has not hit the cash flow at all. It is only a book adjustment. Okay? See, we have scaled our operations, we have expanded our project portfolio across India, across geographies.

Addressed a critical concern about the company's liquidity and operational viability given the reported accounting impact, reassuring that cash flows remain positive.

Asked by Saket Kapoor

Request for detailed breakdown of 'other assets' (INR63 crores) and components of INR100 crores net worth. Partial
So this is actually a part of the unbilled revenue that was there earlier. In addition to that there have been certain debts that company is right now having. We have INR10 crores limit from HDFC which is short-term plus long-term CC. Second, we have INR4.5 crores limit from PNB also which is a CC again. Others are our debtors and our unbilled revenue.

Analysts sought clarity on significant balance sheet items, indicating a need for greater transparency, which management acknowledged and promised for the next quarter.

Asked by Mukesh Bhiwani

Historically negative operational cash flows and plans for improvement. Direct
It is -- I would yes, it is partly a nature of the industry, the nature of our assignments. The competition has been pretty tough when it comes to margins now, especially in case of the PMC assignments... But definitely in this year itself we can see a significant improvement.

Addressed a persistent financial concern, with management attributing it to industry dynamics and outlining a commitment to improvement through diversification.

Asked by Vivek Joshi

Corporate governance concerns following debarment issues and accounting adjustments. Direct
So in fact we would say that if certain management is looking at it in a way in a way of improving the governance. So certain issues that we faced this year this be it the accounting level adjustment or the debarment issues, we had to take certain hard calls for further strengthening the governance so that no such things happen in the future.

Directly addressed investor apprehension regarding past issues and current accounting changes, with management detailing steps taken to strengthen governance and ensure future transparency.

Asked by Ashwin

Risk of further accounting revisions or changes in project scope/cost estimates. Direct
Yes, so there'll be no such further adjustments that will be there in the future, okay? This is just a one-time adjustment that have been done... in future I can guarantee no such accounting adjustments will be there.

Provided crucial reassurance to investors that the recent accounting adjustment was a one-time event and not indicative of ongoing instability in financial reporting.

Asked by Ashwin

Strategy for achieving INR1,000 crores order book by 2030, given global slowdowns. Direct
As far as a INR1,000 crores order book achievement is there, company on a monthly basis is bidding orders close to INR100 crores. We are confident -- if we are confident that we might improve our strike rate, then yes by 2030 this is achievable.

Clarified the company's long-term growth ambition and the strategy to achieve it, acknowledging external challenges while maintaining confidence.

Asked by Krishna Kumar

Geographic diversification, specifically entry into the Middle East and its potential. Direct
Yes. So presently we have explored a few opportunities along with Africa, we are looking at Southeast Asia and Middle East also... I'm expecting entry this year.

Highlighted a key strategic initiative for growth and risk mitigation, providing insights into new market opportunities and the company's approach to international expansion.

Asked by Mahesh Sheth

2 min read 6 chapters

Detailed narrative

Q3 FY26 Financial Performance and Accounting Adjustment

Dhruv Consultancy reported a 9-month FY26 revenue of INR35.36 crores. This figure, along with profitability, was impacted by a prospective non-cash accounting adjustment of approximately INR30 crores. Management clarified this adjustment was a one-time refinement of project cost and margin estimates, undertaken in accordance with Ind AS 8 and Ind AS 115, and does not involve cash outflow or impact operational cash flows. The underlying project-level profitability remains positive, and the company's order book and operational cash flow remain stable.

Strategic Diversification and New Market Entries

In Q3 FY26, Dhruv Consultancy achieved a significant milestone by entering the aviation sector, securing its first project for link taxiways at MIHAN Nagpur in October 2025. This move aligns with the company's Vision 2030 to diversify into other infrastructure sectors like railways, metros, and urban infrastructure, aiming to be a top-five consultant in these areas. Management expects the aviation segment to contribute 10-20% to revenue, leveraging the government's focus on developing 250-300 new airports in Tier 2 and Tier 3 cities.

Robust Order Book and Project Pipeline

The company maintains a strong unexecuted order book of INR256 crores as of December 31, 2025, providing healthy revenue visibility. While the total order book (executed and unexecuted) decreased from INR490 crores to INR465 crores due to the accounting adjustment, this impact was less than 10%. Dhruv has recently submitted bids for projects worth close to INR350 crores and expects a 20-25% strike rate on Indian projects, with the unexecuted order book potentially reaching INR300 crores next quarter.

Enhanced Bidding Strategy and Technical Capabilities

Dhruv's competitive bidding strategy emphasizes technical capability over financial numbers, especially with recent NHAI changes that fix costs for higher-rated consultants. This has enabled the company to bag five new orders in two months at significantly higher rates (5-6 lakh/km for DPRs compared to earlier 2-3 lakh/km). The company is strengthening its technical capabilities through project expertise, handling complex projects like expressways, and adopting advanced technologies such as 3D and 4D modeling.

International Expansion and Geographic Diversification

The company is actively pursuing international opportunities, currently working in Mozambique and Ghana, and exploring Southeast Asia and the Middle East, particularly Saudi Arabia. Management expects to enter the Middle East segment this year, driven by Vision 2030 and massive industrial city developments. While India is expected to remain the core business due to its scale, international diversification aims to mitigate risks and ensure stability across different political and economic scenarios.

Commitment to Improved Governance and Transparency

Addressing analyst concerns regarding past issues and the recent accounting adjustment, management affirmed its commitment to strengthening corporate governance. They stated that the Q3 adjustment was a 'hard call' taken to ensure future transparency and that no further such adjustments are expected. Initiatives include strengthening internal control systems, hiring experienced finance personnel, and fostering leadership development, positioning the company to become a multinational entity with robust governance.

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