Enviro Infra Engineers Limited — Q1 FY26 earnings call

Call held 12 Aug 2025

Management summary

Enviro Infra Engineers reported strong financial performance in Q1 FY26, driven by robust revenue and profit growth. The company secured significant new orders, expanding its order book and strategically diversifying into Zero Liquid Discharge (ZLD) and renewable energy sectors. Management addressed a cyber fraud incident, outlining recovery efforts and strengthened internal controls, while also clarifying the stability of government project funding.

Highlights

  • Revenue from operations grew 17.4% YoY to ₹241 crores in Q1 FY26.

  • EBITDA increased by 25.2% YoY to ₹64 crores, with a margin of 26.7%.

  • Profit after tax (PAT) surged 41.8% YoY to ₹42 crores, achieving a PAT margin of 17%.

  • Secured fresh orders worth approximately ₹1,178 crores in Q1 FY26.

  • Total execution order book stands at ₹2,051 crores, including an O&M portfolio of ₹946 crores.

  • Entered the ZLD segment with a ₹395 crores CETP project and diversified into renewable energy with two solar asset acquisitions.

  • A cyber fraud incident of ₹11.15 crores was detected, with ₹2.5 crores recovered and ₹0.6 crores frozen.

Concerns

  • Cyber Fraud Incident

Key financials

  1. Revenue from Operations ₹241 Cr +17.4%YoY
  2. EBITDA ₹64 Cr +25.2%YoY
  3. EBITDA Margin 26.7%
  4. PAT ₹42 Cr +41.8%YoY
  5. PAT Margin 17%

What they filed

Q1 FY27: revenue up 49.0%, net profit up 7.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue213 247 393 241 227 +7%250 +1%427 +9%359 +49%
EBITDA56 54 99 64 65 +16%68 +26%80 −19%76 +19%
Net profit36 37 74 42 50 +39%42 +14%54 −27%45 +7%
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

₹2,051 Cr

as of 2025-06-30 quantified

Inflow this quarter

₹1,178 Cr

Execution

Fresh orders have a timeline for execution of 24 months. Order book carried from last FY (Rs. 1,185 crores) is almost fully executed this financial year.

Composition

  • O&M Portfolio (contract type) ₹946 Cr 46.1%
  • JJM Projects (project type) ₹110 Cr 5.4%
  • Other Projects (EPC, etc.) (other) ₹995 Cr 48.5%
The company's total execution order book of Rs. 2,051 crores, including a significant O&M portfolio, provides steady long-term revenue visibility, with fresh orders secured in Q1 FY26 having a 24-month execution timeline.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Gross ₹222 Cr
    The current debt is somewhere in the range of 0.2. It is debt to equity. And if I say total debt is Rs. 222 crores. So, as of this 31st March, 2025, it was Rs. 234 crores, so it has gone slightly down.
  • M&A Odisha Solar Asset (SL Infra) Acquisition · Announced

    Diversification into renewable energy sector and clean energy integration.

    40-megawatt solar asset, 24MW already installed and generating revenue. Power purchase agreement signed at Rs 4.1.

    First of all, we have secured two solar assets. One of the assets is a 40-megawatt solar asset in Odisha, Bolangir area. It is an asset of SL Infra wherein PTC was lender. So, PTC has gone for the substitution, and we have purchased this in reverse auction from PTC. The agreements are underway right now. It is expected to be executed within this month.
  • M&A Maharashtra Solar Asset (MSEDCL) Acquisition · Announced

    Diversification into renewable energy sector and clean energy integration.

    29-megawatt solar power project with state financial assistance of Rs. 3.2 crores per megawatt. Power sold at Rs. 0.88 per unit for 25 years.

    The second one is a 29-megawatt solar power project in Maharashtra. So, this particular project is from MSEDCL in which there is an SFA, state financial assistance of Rs. 3.2 crores per megawatt. We are just on the verge of finalizing and the process is ongoing for tying up the term loan from the banks.
  • Liquidity Liquidity disclosed The company has maintained fluent cash flows and has been OCF pre-tax positive, even in a challenging year, indicating sufficient liquidity.
    Even in the challenging year like FY ‘25, we have been able to maintain our cash flows fluently and we had been OCF pre-tax positive.

Guidance & targets

Revenue

  • Revenue CAGR Revenue · next five years · High confidence 35-40%
    Yes, definitely. We look forward to having this 35%, 40% CAGR growth for at least next five years. So, we understand till 2030, definitely we have that vision and we can look forward to this type of growth.

    — Manish Jain

Profitability

  • EBITDA Margins Profitability · ongoing · High confidence 22-24%
    Our guidance on the EBITDA margins will always remain to be in the range of 22% to 24%.

    — Manish Jain

Order Inflow

  • Order Inflow Order Inflow · FY26 · High confidence ₹2,500 crores
    For this financial year, we have given an order guidance in the range of Rs. 2,500 crores.

    — Manish Jain

O&M Revenue

  • O&M Revenue O&M Revenue · from FY27 · High confidence ₹70-75 crores
    So, we foresee that from FY ‘27 the O&M revenue should increase to somewhere around Rs. 70 crores, Rs. 75 odd crores.

    — Manish Jain

O&M Profitability

  • O&M Margins O&M Profitability · ongoing · High confidence 30-35%
    Yes, O&M margins are in the range of 30% to 35%.

    — Manish Jain

Debt

  • Debt-to-Equity Ratio Debt · ongoing · High confidence around 1
    Our basic thought process is that our debt-to-equity ratio that should remain comfortable. Right now, it is at 0.2. Maybe if we add on some HAM projects, means it can get somewhat increased, but not to a level that we will look forward to not crossing it more than 1 at any point of time.

    — Manish Jain

Project Mix

  • EPC to HAM Mix Project Mix · ongoing · High confidence 75% to 25%
    So, we always try to maintain that at a level of 75% to 25% for EPC to HAM.

    — Sanjay Jain

What to watch in Q2 FY26

Cyber Fraud Recovery Progress

next quarter
Current ₹2.5 crores recovered, ₹0.6 crores frozen
Target Further recovery of frozen funds

Why it matters

To assess the financial impact mitigation and effectiveness of recovery efforts.

around Rs. 2.5 crores has come back into the company, another Rs. 0.6 crores is what we look for, maybe another one month time or so it should come back.

Risks & concerns

  • Cyber Fraud Incident

    high

    A cyber fraud incident of ₹11.15 crores was detected, with ₹2.5 crores recovered and ₹0.6 crores frozen. Management has strengthened internal controls and foregone remuneration to mitigate losses.

    Management acknowledged

  • Government Payment Delays (JJM)

    medium

    Delays in fund release for Jal Jeevan Mission (JJM) projects occurred in FY25 due to central government issues. Management states the 'worst is over' and the company is shifting focus from JJM to other centrally funded schemes.

    Analyst acknowledged

  • Litigation/Arbitration

    low

    Arbitration in contracts is a normal occurrence and does not put the company in a 'red zone'. Management continues to execute projects for the same state government.

    Analyst downplayed

Q&A highlights

8 direct
Receivable cycle and government funding for state projects Direct
Basically, first of all, I will clarify on the JJM aspect. In the last financial year, and starting from March 2024, there was some issue with respect to the release of funds from the center... Now, if we look into the entire water and wastewater treatment sector in India, basically, this sector is a government driven sector... The funds used to move smoothly. There has been just one year, it was last financial year wherein there has been a delay.

Addresses concerns about payment delays from government clients, especially for JJM projects, and clarifies the nature of funding for various schemes.

Asked by Sandip Sabharwal

Margin differential between ZLD and STP/WTP projects Direct
Aniket, basically if you see the way the complexity of any of the projects will increase, so definitely the margin profile is expected to improve. So, a ZLD project in itself is highly technically competitive project, so the margins in it will be equivalent to the margin that we project for any of the common affluent treatment plant projects. So, it will be in the range of somewhere around 30%.

Provides specific margin expectations for the newly entered ZLD segment, indicating higher profitability compared to traditional projects.

Asked by Aniket Jain

Outlook for next 2-3 years and sustainability of 30-40% revenue growth Direct
Yes, definitely. We look forward to having this 35%, 40% CAGR growth for at least next five years. So, we understand till 2030, definitely we have that vision and we can look forward to this type of growth.

Confirms aggressive long-term revenue growth targets and the underlying drivers, providing confidence in the company's future trajectory.

Asked by Dinesh Kulkarni

Details of the cyber fraud incident Direct
Basically a person impersonated as being Manish Jain and put my DP on his mobile and instructed team for some funds to be transferred. So, it has been an unfortunate incident which has happened in the company. So, the main part to mitigate, we have taken up the basic mitigation measures, around Rs. 2.5 crores has come back into the company, another Rs. 0.6 crores is what we look for, maybe another one month time or so it should come back.

Provides transparency on a significant financial incident, including the nature of the fraud, recovery status, and management's personal commitment to mitigate losses.

Asked by Manish Gupta

Details of solar project acquisitions and execution Direct
First of all, we have secured two solar assets. One of the assets is a 40-megawatt solar asset in Odisha... The second one is a 29-megawatt solar power project in Maharashtra... We are building up our capacities. Basically, we have formed a subsidiary in the name of EIE Renewables. So, these two projects are subsidiaries of EIE Renewables itself.

Clarifies the specifics of the company's entry into the renewable energy sector, including project details, funding mechanisms, and the role of its new subsidiary.

Asked by Dhananjay Mishra

O&M order book, revenue growth, and margins Direct
So, we foresee that from FY ‘27 the O&M revenue should increase to somewhere around Rs. 70 crores, Rs. 75 odd crores... Yes, O&M margins are in the range of 30% to 35%.

Highlights the significant growth potential and higher profitability of the O&M segment, which provides long-term revenue visibility.

Asked by Dhananjay Mishra

Reasons for company's high margins and niche in the project business Direct
Basically, we are doing entire project in-house. We have our own execution teams in-house along with our in-house design teams wherein we find our prudence in providing the most viable solutions, as well as we are having the in-house capabilities which prevent any subletting of our margins, strengthens our capacity to execute the projects well ahead of time and keeping the quality of execution in control.

Explains the operational strategies that contribute to the company's superior margins and return ratios, emphasizing internal capabilities and cost control.

Asked by Aashish Upganlawar

JJM funding delays and future strategy regarding such projects Direct
Basically, what I know from my side and as my understanding is, there is no issue at least with respect to the availability of funds with the center... As far as this JJM is concerned, basically we are not inclined to enter further for these projects. These are more of the pipeline schemes. We are more towards implementation of the plants and entering for the advanced wastewater and wastewater treatment technologies.

Reassures investors that JJM funding issues were temporary and outlines a strategic shift towards more advanced and stable projects, reducing exposure to past funding volatility.

Asked by Nikhil Chaudhary

2 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Financial Performance

Enviro Infra Engineers delivered a robust financial performance in Q1 FY26. Revenue from operations grew by 17.4% year-on-year to ₹241 crores. The company's EBITDA increased by 25.2% to ₹64 crores, resulting in a healthy EBITDA margin of 26.7%. Profit after tax (PAT) saw a significant rise of 41.8% year-on-year, reaching ₹42 crores, with a PAT margin of 17%.

Robust Order Book and Future Growth Outlook

The company secured fresh orders worth approximately ₹1,178 crores in Q1 FY26, contributing to a total execution order book of ₹2,051 crores. This includes a substantial O&M portfolio of ₹946 crores, providing steady long-term revenue visibility. Management guided for an order inflow of ₹2,500 crores for the full FY26 and projected a 35-40% CAGR revenue growth for at least the next five years, indicating strong future prospects.

Strategic Diversification into ZLD and Renewable Energy

Enviro Infra made a strategic entry into the Zero Liquid Discharge (ZLD) segment with a ₹395 crores CETP project in Maharashtra, utilizing advanced ultrafiltration, reverse osmosis, and MVR technology. Additionally, the company diversified into the renewable energy sector by acquiring two solar assets: a 40MW project in Odisha and a 29MW project in Maharashtra. These IPP projects are being managed by its subsidiary, EIE Renewables, and are expected to contribute to clean energy integration.

Cyber Fraud Incident and Mitigation Efforts

The company reported a cyber fraud incident amounting to ₹11.15 crores detected in Q1. Of this, ₹2.5 crores has been recovered, and ₹0.6 crores is currently frozen. FIRs have been filed, and investigations are underway. To mitigate financial losses, the Chairman and Managing Director have voluntarily foregone their remuneration, and internal controls have been strengthened to prevent future occurrences.

Government Project Funding and Receivable Management

Management addressed concerns regarding payment delays from state governments, particularly for Jal Jeevan Mission (JJM) projects, clarifying that delays in FY25 were a one-off event due to central fund release issues related to elections. The company is now strategically focusing on other centrally funded schemes like AMRUT and Namami Gange, and advanced wastewater treatment technologies, which offer more stable funding and smoother project execution.

Operational Efficiency and Margin Sustainability

The company attributes its consistently strong EBITDA margins (26.7% in Q1 FY26, with a guidance of 22-24%) to its in-house execution and design capabilities. This integrated approach allows for providing viable solutions, preventing margin erosion from subletting, and maintaining high quality control. O&M margins are anticipated to be even higher, in the range of 30-35%, further bolstering profitability.

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