Hind.Construct.

Hind.Construct. reported a standalone turnover of ₹1,069 crores for Q1 FY26, a decrease from ₹1,265 crores in the prior year, primarily due to accelerated execution of older projects and a lag in new order inflows. Despite this, standalone profits (PAT) surged by almost 50% YoY to ₹38 crores, and the standalone EBITDA margin improved to 14.9%. On a consolidated basis, the company achieved an income of ₹1,100 crores, with a robust EBITDA margin of 16.5% and PAT of ₹50 crores, though consolidated income was lower YoY due to the divestment of Steiner.

The company maintains a strong order backlog of ₹11,188 crores, predominantly from the transport sector, followed by hydro, nuclear, and water projects, diversified geographically. Additionally, HCC is the lowest bidder (L1) in projects worth ₹6,000 crores, which are expected to convert into orders within 1-1.5 months. A substantial bid pipeline of ₹40,000 crores has been identified, with management targeting to secure 25-30% of these orders, indicating strong future revenue visibility.

HCC is actively pursuing accelerated debt deleveraging, aiming to reduce its current net debt of approximately ₹3,200 crores to below ₹2,000 crores within the next 15-18 months. This will be achieved through a combination of core Bank Guarantee (BG) mechanisms, operational cash flows, and planned capital raising. The company also has a significant debt repayment of ₹900 crores due in March 2026, which it plans to meet through these diversified strategies.

Several key projects saw significant progress: the Anji Khad Cable Stayed Bridge in J&K was inaugurated, and units 5 & 6 of the Tehri Pumped Storage Scheme achieved commercial operation. The Vishnugad Pipalkoti Project, utilizing a Tunnel Boring Machine, is 50% complete (6.5 km out of 12 km). Mumbai Metro Line 3 is 95% complete, with system checks underway, and the Mumbai Coastal Road is fully operational with minor works remaining. New projects like Agardanda Cable Stayed Bridge, Bhivpuri Pumped Storage Project, and Indore Metro Project are in the mobilization phase.

Management projects a substantial ramp-up in execution and revenue growth from FY27 onwards, with targets of 15-20% for FY27 and a 20-25% CAGR thereafter. EBITDA margins are expected to be maintained in the 13-15% range, reflecting the selective nature of projects with high technical capabilities and lower competitive intensity. The impact of new order bookings is anticipated to drive exponential growth in fiscal years 2027 and 2028.

HCC received ₹250 crores from a Vivad se Vishwas settlement, significantly boosting liquidity. Additionally, the company has achieved claims to award conversion amounting to ₹453 crores and holds approximately ₹2,000 crores in arbitration awards in its favor. These awards can be monetized by depositing money in court and withdrawing against bank entries, providing further financial flexibility for debt reduction and working capital needs.

HCC Infra remains the major operating subsidiary, integral to the EPC business and potentially taking on selective BOT projects, contributing up to 10% of the order backlog. The H56 IMO subsidiary, formed from the Steiner Group divestment, holds substantial receivables and earnouts that will be wound down over the next few years. The company is actively involved in three active JVs: Coastal Road (with Hyundai Development), Indore Metro, and Bhivpuri Pumped Storage Project (both with Tata projects).

To support growth objectives and debt reduction, HCC plans to raise ₹700-900 crores in equity during the next quarter, likely through a rights issue. The promoter group is committed to underwriting this, ensuring non-dilutive capital for existing shareholders. This strategy aims to improve the company's investment-grade rating, enhance access to capital, and ultimately boost shareholder value by reducing fund-based debt and building free cash flows as reserves.