Detailed Narrative
Strong Order Book Growth and Revenue Visibility
Enviro Infra Engineers reported a robust total order book of ₹6,814 crores as of May 29, 2026, providing revenue visibility for the next 24 months. This includes ₹2,733 crores for water and wastewater execution, ₹951 crores for O&M in the same segment, ₹2,051 crores for renewable execution, and ₹1,079 crores for renewable O&M and IPP. Recent Q4 additions include a ₹348 crore project from BUIDCO and two sanitation projects worth ₹824 crores, alongside four BESS projects from NTPC totaling 930 MWh and valued at approximately ₹1,070 crores.
Strategic Diversification into Renewable Energy
The company has successfully diversified into the renewable energy sector, establishing a presence in solar, wind, and Battery Energy Storage Systems (BESS). A key milestone was the acquisition of Suyog Urja Limited, a wind EPC company, enhancing execution capabilities. The company secured multiple BESS projects, including a 150 MWh project in Bihar, positioning itself as a first mover in India's battery storage market. This diversification aligns with a long-term strategy to build a broader environmental infrastructure platform.
FY26 Financial Performance and Q4 Challenges
For the full year FY26, Enviro Infra achieved a revenue of ₹1,145.6 crores, marking a 7.5% year-on-year growth, with an EBITDA of ₹276.8 crores and a margin of 24.2%. However, Q4 FY26 saw revenue of ₹427.3 crores (8.8% YoY growth) but a lower PAT margin of 12.4%. This was attributed to higher execution and operational costs, including increased employee costs (6% of revenues), other expenses (3.5% of revenues), an ECL provision of ₹10 crores, and higher depreciation of ₹25 crores.
Working Capital Strain from Government Payment Delays
The company's working capital cycle stretched to 166 days, significantly higher than the target of 95-100 days, primarily due to delayed fund releases from AMRUT projects across several states. Unbilled revenue (UBR) days increased to 195. Management noted that while the cash position remains comfortable, these delays impacted revenue conversion and profitability. They anticipate an easing of the situation as funds from Chhattisgarh have been released, and confirmations for other states are in place.
Conservative FY27 Guidance with Margin Adjustments
For FY27, Enviro Infra projects a conservative topline of ₹2,000 crores, with an expected PAT of ₹270-280 crores, translating to a PAT margin of 13.5% to 14%. The EBITDA margin guidance has been revised downwards to 21-22% from the previous 22-24%, reflecting potential impacts from the global crisis on commodity prices. The renewable segment is expected to contribute ₹650 crores to the FY27 topline, with the BESS EPC business anticipating a PAT margin of around 10%.
Future Growth and Capital Allocation Strategy
The company aims for at least ₹2,500 crores in new order inflows for FY27, with a current bid pipeline of ₹1,200 crores and an additional ₹5,000 crores in projects of interest. Total debt stands at ₹422 crores, with a net debt level of 0.34, well below the comfortable maximum of 1:1. Capex for FY27 is projected to be modest at ₹20-30 crores, with a focus on asset monetization if debt levels become heavy. The company is also exploring joint venture opportunities for desalination projects, leveraging its pre-qualification capabilities.