Enviro Infra Engineers Limited — Q2 FY26 earnings call

Call held 5 Nov 2025

Management summary

Enviro Infra reported a strong Q2 and H1 FY26, demonstrating resilient performance with significant growth in profitability and robust order inflows. The company's execution order book has surpassed INR 2,000 crores, bolstered by new project wins and a substantial O&M portfolio. Strategic expansion into zero-liquid discharge and renewable energy is progressing well, with clear revenue targets set for these segments. Management is focused on improving operating cash flow and maintaining healthy margins through its in-house execution model.

Highlights

  • Q2 FY26 Revenue from operations stood at INR 227 crores, reflecting a 6.7% YoY growth.

  • Q2 FY26 EBITDA was INR 65 crores, up 16.8% YoY, with healthy margins of 28.56%.

  • Q2 FY26 Profit After Tax (PAT) rose by 36% YoY to INR 50 crores, achieving a PAT margin of 20.5%.

  • H1 FY26 Revenues reached INR 468 crores (12% YoY growth) and EBITDA was INR 129 crores (20.8% YoY growth) with a 27.6% margin.

  • The total execution order book now exceeds INR 2,000 crores, including a new INR 248 crores order from Bhopal Municipal Corporation.

  • Bids have been submitted for projects worth over INR 8,000 crores, with management confident of exceeding FY26 fresh order book guidance of INR 2,500 crores.

  • The renewable energy segment is targeted to generate INR 200 crores in revenue for FY26, with a target of INR 500 crores for FY27.

  • Debtor cycle improved from 70 days (March 2025) to 49 days, and the company aims for positive operating cash flow (OCF) for FY26.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹227 Cr
    YoY +6.7%
  • EBITDA
    ₹65 Cr
    YoY +16.8%
  • EBITDA Margin
    28.6%
  • PAT
    ₹50 Cr
    YoY +36%
  • PAT Margin
    20.5%
  • O&M Revenue
    ₹21 Cr

H1 FY26

  • Revenue
    ₹468 Cr
    YoY +12%
  • EBITDA
    ₹129 Cr
    YoY +20.8%
  • EBITDA Margin
    27.6%
  • PAT
    ₹92 Cr
    YoY +38.6%
  • PAT Margin
    18.7%

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

₹2,000 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹248 Cr

Pipeline

L1 awaiting loa

Bids submitted for projects with results awaited

Our momentum has been broad-based across both municipal and industrial sectors, reinforcing our position as one of the most trusted players in India's water and wastewater management space.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Debt disclosed Cost 7.5%
    • New borrowing Increase in long-term borrowing for HEM projects (Mathura). ₹35 Cr
    • New borrowing Increase in short-term borrowing for MSME vendor payments. ₹25 Cr
    non-current borrowing has increased by roughly INR 34 crores and the current borrowing also has increased by roughly INR 27 crores.
  • Liquidity Liquidity disclosed H1 FY26 saw negative cash flow of approximately INR 100 crores, but management expects to achieve positive operating cash flow for the full FY26.
    The total cash flow is somewhere around INR100 crores negative as it looks in H1. So it has got improved in comparison to same period last financial year H1 '24 that is... First of all, I want to be OCF positive. For the current financial year...

Guidance & targets

Order Book

  • Fresh Order Book Order Book · FY26 · High confidence exceed INR 2,500 crores
    we are confident that we shall be able to exceed our guidance of fresh order book of INR 2,500 crores in FY '26.

    — Manish Jain

Revenue Growth

  • Overall Revenue Growth (Water & Wastewater) Revenue Growth · Current financial year (FY26) · High confidence 35% to 40% odd percentage
    So looking forward to that growth rate which we expected on the top line, which is somewhere in the range of 35 to 40 odd percentage, which we expect. So we maintain our guidance of the similar top line to achieve in the current financial year as well.

    — Manish Jain

  • Renewable Sector Revenue Growth Revenue Growth · Next 4-5 years (after FY27) · Medium confidence 40% to 50%
    In the coming years we expect to grow maybe in FY '27 we can expect that we should be somewhere around INR 500 crores and then look forward to a growth rate of 40% to 50% maybe for the next four years, five years further.

    — Manish Jain

Profitability

  • EBITDA Margins Profitability · Next and following years · High confidence 22% to 24%
    As far as the margin guidance is concerned, we have always confirmed our EBITDA margins to be in the range of 22% to 24%.

    — Manish Jain

Revenue

  • Renewable Sector Revenue Revenue · Current financial year (FY26) · High confidence ~INR 200 crores
    For the current financial year, we have confirmed a guidance of around INR 200 crores in revenues which will get generated from the renewable sector.

    — Manish Jain

  • Renewable Sector Revenue Revenue · FY27 · Medium confidence ~INR 500 crores
    In the coming years we expect to grow maybe in FY '27 we can expect that we should be somewhere around INR 500 crores and then look forward to a growth rate of 40% to 50% maybe for the next four years, five years further.

    — Manish Jain

Market context

  • Operating Cash Flow (OCF) Liquidity · Current financial year (FY26) · High confidence positive
    First of all, I want to be OCF positive. For the current financial year...

    — Manish Jain

What to watch in Q3 FY26

Conversion of Unbilled Revenue to Billed

Q3 FY26
Current Significant unbilled revenue due to monsoon and project stages, contributing to H1 negative OCF.
Target Significant reduction in unbilled revenue.

Why it matters

This conversion is crucial for improving cash flow and revenue recognition, directly impacting the company's goal of achieving positive operating cash flow for the full fiscal year.

There has been some increase in the unbilled revenue. So, basically that unbilled revenue getting recognized in terms of the final number into revenues and the realization. So, that will happen and basically in this Q3 itself, we look forward to this number going down significantly.

Risks & concerns

  • Exceptional Loss due to Fraud

    medium

    An exceptional loss of approximately INR 8.5 crores was incurred due to a fraud, with INR 2.68 crores recovered from an INR 11.15 crores outflow.

    Management acknowledged

Q&A highlights

6 direct
Conservatism in EBITDA Margin Guidance Partial
As far as when we are committing any of the margins, the guidance, first of all, the guidance has to remain intact. So that guidance always remain in that segment. However, expecting better margin profile and improved margins, we definitely look forward to achieving better margins, but as a guidance perspective, definitely we will restrict ourselves to that level of 22% to 24% EBITDA margins.

Analyst questioned why official EBITDA margin guidance was lower than current H1 performance, and management maintained a conservative stance while acknowledging potential for better.

Asked by Deepak Poddar

Low Success Rate on Submitted Bids Partial
Right, Pratik ji. Presently, the order inflow has been this INR 248 in this current quarter. So, I will say definitely this has flown only in the month of October. There are some projects wherein we are L1, but we definitely give any confirmation to the market only when we receive the LOA. There are some of the projects wherein we are L1 and we look forward to confirming the same to the market as and when the orders are received.

Analyst challenged the seemingly low conversion rate of submitted bids to firm orders, prompting management to explain the timing of LOA issuance and the expectation of more conversions from L1 bids.

Asked by Prateek Bhandari

Discrepancy between EBITDA and Operating Cash Flow (OCF) Direct
When we are having various working capital limits with our bankers. So, there is a component of that collaterals and margins, which we are required to place with the bankers for disbursement of these working capital limits, which can be in form of bank guarantee, LCs or CC. The total CC limit is hardly 10% at any point of time... From that 35 odd percentage of collateral plus margin, we have now come down to somewhere around 15% presently.

Analyst raised a critical concern about the historical gap between EBITDA and negative OCF, which management attributed to working capital blockages (collaterals, margins) and indicated improvement in the current period.

Asked by Meet Shah

Renewable Sector Margin Profile Direct
No, no, no. That is not true. The margin profile in the renewable sector will be a bit lower in comparison to those in our water and wastewater sectors. There we have our technological prudence which is available based on which we do have the better margin profiles.

Management clarified that margins in the renewable segment are expected to be lower than the core water and wastewater business, providing important context for the company's future profitability mix.

Asked by Manish Jain (Wealth Grow Security)

In-house Execution as a Margin Driver Direct
Manish, basically when we are executing the project on our own, there are three, four components wherein we save. First of all, it is the margins which we could have forgone by giving any other component on a subcontract basis. So, this is the margin which is getting accrued into the company if we are doing it on our own.

Management elaborated on the strategic benefits of its in-house execution model, explaining how it directly contributes to higher margins, better project control, quality assurance, and design efficiency.

Asked by Manish Jain (Wealth Grow Security)

Negative Cash Flow in H1 and Outlook Direct
Definitely. Definitely. There has been some increase in the unbilled revenue. So, basically that unbilled revenue getting recognized in terms of the final number into revenues and the realization. So, that will happen and basically in this Q3 itself, we look forward to this number going down significantly.

Management addressed the H1 negative cash flow, attributing it to unbilled revenue and seasonal factors, and provided a clear expectation for its reversal and positive OCF in the second half.

Asked by Manish Jain (Wealth Grow Security)

Diversification into Maharashtra and ZLD Opportunities Direct
The opportunity is definitely getting bigger. The AMRUT 2 schemes are just on the verge of rollout in Maharashtra. Apart from this, this ZLD project which we have got in Maharashtra from MIDC, a number of projects are further coming up in the state.

Highlighted new growth avenues and geographical expansion, particularly in Maharashtra and the rapidly growing Zero Liquid Discharge (ZLD) segment, which is crucial for future order book and revenue.

Asked by Dinesh Kulkarni

Distinction between Water/Wastewater and Renewables Guidance Direct
No, no. Basically, the revenue guidance from renewable sector will always be different from what we will achieve from the water and wastewater segment. So, we will always be very clear. The revenue guidance is that 35 to 40-odd percentage revenue guidance is from the water and wastewater segment itself. This INR200 crore revenue guidance which we are giving from the renewable sector, it is entirely different from that top line guidance which we are giving for water and wastewater sector.

Clarified that the core 35-40% revenue growth guidance applies specifically to the water and wastewater segment, while renewable energy targets are separate, preventing misinterpretation of overall growth drivers.

Asked by Manish Choraghe

2 min read 6 chapters

Detailed narrative

Strong Q2 & H1 FY26 Financial Performance

Enviro Infra reported robust financial results for Q2 FY26, with revenue from operations reaching INR 227 crores, a 6.7% year-on-year increase. EBITDA grew by 16.8% to INR 65 crores, achieving a healthy margin of 28.56%. Profit after tax surged by 36% to INR 50 crores, reflecting a PAT margin of 20.5%. For the first half of FY26, revenues stood at INR 468 crores (12% growth), EBITDA at INR 129 crores (20.8% growth) with a 27.6% margin, and PAT at INR 92 crores (38.6% growth) with an 18.7% margin.

Robust Order Book and Pipeline

The company's total execution order book stands at over INR 2,000 crores as of September 30, 2025, including a new INR 248 crores order from Bhopal Municipal Corporation for an STP and seaway network. This is complemented by a strong operation and maintenance portfolio of INR 932 crores. Enviro Infra has also submitted bids for projects worth over INR 8,000 crores, with management expressing confidence in exceeding the FY26 fresh order book guidance of INR 2,500 crores.

Strategic Expansion in Renewables and ZLD

Enviro Infra is actively diversifying its portfolio, with significant progress in the renewable energy sector. The company is developing a 40 MW solar asset in Balangir, Odisha (24 MW already operational, 16 MW by April 2026) and a 29 MW solar asset in Maharashtra (expected by June 2026). These projects are projected to generate INR 200 crores in revenue for the current fiscal year, with a target of INR 500 crores for FY27. The company is also expanding its footprint in zero-liquid discharge and tertiary treatment segments, leveraging advanced technologies.

Working Capital Management and Cash Flow Outlook

Despite a seasonally moderated pace of process billing in H1 due to monsoon, the company improved its debtor cycle from 70 days (March 2025) to 49 days. H1 FY26 saw a negative cash flow of INR 100 crores, primarily due to working capital blockages in collaterals and margins, which have now reduced from 35% to 15%. Management expects a significant reduction in unbilled revenue in Q3 and aims to achieve positive operating cash flow for the full FY26.

In-house Execution as a Margin Driver

Management highlighted its in-house execution model as a key factor for maintaining healthy EBITDA margins. This approach allows the company to retain margins that would otherwise go to subcontractors, ensures better control over project execution and quality, and leverages design prudence to deliver viable solutions. This strategy contributes to operational efficiencies and helps achieve better profitability compared to industry averages.

Geographical Diversification and Sector Focus

Enviro Infra is expanding its geographical presence, particularly in Maharashtra and Odisha, while maintaining a pan-India bidding strategy across states like Delhi, UP, Bihar, and Gujarat. The company is focusing on the industrial segment, specifically Common Effluent Treatment Plants (CETPs) invited by industrial development corporations, and is also targeting larger PSU projects (e.g., IOC, DTCL, IOCL) for ETPs and water treatment plants in thermal power plants.

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