H.G. Infra Engineering Limited — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

H.G. Infra Engineering reported a mixed Q3 FY26, with a strong order book and promising new order inflows, alongside strategic diversification into green energy. However, profitability saw a decline year-on-year, impacted by project delays in the solar segment, higher tax provisions, and a temporary increase in debt to support working capital needs. Management remains optimistic about future growth, driven by a robust bidding pipeline and asset monetization plans.

Highlights

  • Order book of ₹13,624 crores provides strong revenue visibility, diversified across Roads (64%), Railways (20%), and Renewables (15%).

  • New order inflow of ₹3,300 crores in 9MFY26, with a target to add ₹4,000-5,000 crores by March '26, indicating robust pipeline conversion.

  • Progress in HAM asset monetization with binding offer from Neo Infra Income Opportunities Fund and expected realization of ₹500-600 crores from 3 projects this FY.

  • Strategic diversification into new sectors like solar energy, transmission, and battery storage, with significant capacity already executed or ordered.

Concerns

  • Standalone PAT for Q3 FY26 declined to ₹97 crores (6.7% margin) from ₹137 crores (9.1% margin) in Q3 FY25.

  • Consolidated PAT for Q3 FY26 declined to ₹94 crores (6.6% margin) from ₹115 crores (9.1% margin) in Q3 FY25.

  • Solar projects faced delays due to prolonged monsoon and transmission line infrastructure development, impacting commissioning timelines.

  • Overall debt level temporarily increased due to additional working capital limits availed to bridge funding gaps for solar projects.

  • Higher tax rate of 31.5% in Q3 FY26 due to a ₹6 crore MSME provision for tax matters.

Key financials

  1. Standalone Revenue ₹1,450 Cr
  2. Standalone EBITDA Margin 15.5%
  3. Standalone PAT ₹97 Cr
  4. Standalone PAT Margin 6.7%
  5. Consolidated Revenue ₹1,421 Cr
  6. Consolidated EBITDA Margin 21.7%
  7. Consolidated PAT ₹94 Cr
  8. Consolidated PAT Margin 6.6%
  9. Standalone Gross Debt ₹1,945 Cr
  10. Consolidated Gross Debt ₹6,032 Cr
  11. Consolidated Cash ₹255 Cr

What they filed

Q1 FY27: revenue down 46.9%, net profit down 77.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,064 1,509 1,973 1,709 1,154 +8%1,450 −4%1,354 −31%907 −47%
EBITDA174 250 283 236 147 −16%224 −10%127 −55%77 −67%
Net profit89 137 212 125 67 −25%97 −29%100 −53%28 −78%
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.

Segment breakdown

  • Roads & Highways (Order Book)
    64% Share of Total Order Book
  • Railways (Order Book)
    20% Share of Total Order Book
  • Renewables (Order Book)
    15% Share of Total Order Book
  • Other (Order Book)
    1% Share of Total Order Book

Order book

high confidence

Total value

₹13,624 Cr

as of 2025-12-31 quantified

Inflow this quarter

₹3,300 Cr

Composition

Mix 5 segments
  • Roads & Highways 64%
  • Railways & Metro 20%
  • BESS 12%
  • Solar & Transmission 3%
  • Other sectors 1%

Share of order book by segment

Pipeline

L1 awaiting loa

Highway projects (EPC/HAM), Railway projects, BESS bids

Cancellations & deferrals

  • deferred: Jharkhand Package-10 appointed date delayed, impacting Q3FY26 revenue by ₹200-300 crores.
Management expects new projects to flourish after deliberation with NHAI, targeting significant order additions by March '26 and in FY27.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Gross ₹6,032 Cr
    • New borrowing Company availed additional working capital limits to bridge funding gap for solar projects, temporarily increasing overall debt.
    On a standalone basis, our gross debt stands at INR1,945 crores. This comprises of INR914 crores in working capital, INR631 crores on term loans and current maturity, trade limit and other means of debt. Regarding the consol number, revenue for Q3FY26 reached at INR1,421 crores with an EBITDA at INR309 crores of 21.7% margin. PAT for Q3FY26 stood at INR94 crores with a PAT margin of 6.6% compared to INR115 crores at a margin of 9.1% in Q3FY25. On a standalone basis, our gross debt stands at INR1,945 crores. This comprises of INR914 crores in working capital, INR631 crores on term loans and current maturity, trade limit and other means of debt. Regarding the consol number, revenue for Q3FY26 reached at INR1,421 crores with an EBITDA at INR309 crores of 21.7% margin. PAT for Q3FY26 stood at INR94 crores with a PAT margin of 6.6% compared to INR115 crores at a margin of 9.1% in Q3FY25. This debt is there with me, consol debt, INR6,032 crores and consol cash is INR255 crores.
  • M&A 5 HAM SPVs Divestment · Signed · Consideration ₹[object Object] (undisclosed)

    Monetization of HAM assets to unlock capital and reduce equity requirement.

    Expecting ₹500-600 crores as first part of consideration for these projects, with 3 projects expected to complete transaction within current financial year.

    In August 25, we executed a binding offer document with Neo Infra Income Opportunities Fund for the divestment of our HAM portfolio in 5 wholly owned subsidiaries. We have executed the security purchase agreement of all 5 projects during the previous quarter... we are expected to complete the transaction for at least 3 of the projects, SPVs within the current financial year, and we are expecting around INR500 crores to INR600 crores as first part of consideration for these projects.
  • Liquidity Cash ₹255 Cr Additional working capital limits availed to bridge funding gap for solar projects.
    To bridge the funding gap and ensure timely project completion, the company has availed additional working capital limits. This debt is there with me, consol debt, INR6,032 crores and consol cash is INR255 crores.

Guidance & targets

Order Inflow

  • New Order Inflow Order Inflow · by March 2026 · High confidence ₹4,000-5,000 crores
    quite hopeful to add projects worth around INR4,000 crores to INR5,000 crores by March 26.

    — Harendra Singh

  • New Order Inflow Order Inflow · FY27 · Medium confidence ₹10,000-12,000 crores
    we are targeting around INR10,000 crores to INR12,000 crores of order in the year FY26-27.

    — Harendra Singh

Revenue

  • Revenue Revenue · FY27 · Medium confidence ₹7,000 crores
    we will be touching around INR7,000 crores without much of a problem for the next year.

    — Harendra Singh

  • Q4 Revenue Revenue · Q4 FY26 · High confidence ₹2,000 crores
    for the last quarter, we are expecting to do around INR2,000 crores.

    — Harendra Singh

Profitability

  • EBITDA Margin Profitability · Q4 FY26 · High confidence 15%
    15%, roughly around 15%.

    — Harendra Singh

  • EBITDA Margin (Future Bids) Profitability · Future · Medium confidence 14%
    the market trend is giving a bit of a sense of correction where the margins are likely to be not in the same number would be around 14% or say that number.

    — Harendra Singh

Project Completion

  • BESS Project Completion Project Completion · by March 2026 · High confidence 85%
    Around 85% of the BESS would be completed by March because the third BESS do have the time line till June '27.

    — Harendra Singh

Asset Monetization

  • HAM Asset Monetization Proceeds Asset Monetization · current financial year · High confidence ₹500-600 crores
    we are expecting around INR500 crores to INR600 crores as first part of consideration for these projects.

    — Harendra Singh

What to watch in Q4 FY26

Solar project commissioning and debt reduction

Q4 FY26 / Q1 FY27
Current 95.8% physical progress, commissioning delayed to March/April '26
Target Full commissioning and receipt of ₹425 crores from SPV

Why it matters

Crucial for improving liquidity, reducing debt, and realizing returns from solar investments.

So in April and May, in quarter 1, we would be getting the entire debt once we commission the plant in totality.

Risks & concerns

  • Solar project delays

    medium

    Prolonged monsoon and transmission line issues caused delays in solar project commissioning, pushing completion to March/April '26.

    Management acknowledged

  • Increased debt due to solar funding gap

    medium

    Additional working capital limits were availed to bridge the funding gap for solar projects, temporarily increasing overall debt.

    Management acknowledged

  • Weak NHAI tender pipeline and slow project awarding

    medium

    Less traction in new project awarding from NHAI in the last 18 months, though management expects improvement in FY27.

    Analyst acknowledged

  • Decline in PAT margin

    medium

    PAT margin declined due to specific project profit projections and a higher tax rate from an MSME provision.

    Analyst acknowledged

  • CBI matter

    low

    CBI search in offices, but management states no impact on operations and financial position, matter is subjudice.

    Management downplayed

Q&A highlights

5 direct, 1 evasive
Risk of cancellation for Nagpur EPC orders Direct
Probably the cancellation of these projects is not at all in pipeline or in discussion. The land acquisition which actually has been impacted in the recent past because of the municipal election in Maharashtra.

Addresses a key concern about potential order book reduction and project delays due to external factors like elections and land acquisition.

Asked by Mohit Kumar

Weakness in NHAI tender pipeline and outlook for FY27 Partial
as far as development and with getting the feelers from the authority, it is very promising that the pipeline is so long and the land acquisition which is a very much prerequisite condition for the authority to award any project, which earlier was not there as well as the quality of the DPR validation through their DPR sale is taking some time.

Highlights the ongoing challenges in project awarding from NHAI but expresses optimism for future pipeline, crucial for sustained growth.

Asked by Mohit Kumar

Reasons for higher tax rate in Q3 FY26 Direct
So there has been see for last year, there has been for MSME INR6 crores of provision, which has been made in this year for the tax matter. So for that reason, it is a bit higher.

Explains a specific financial deviation (higher tax rate) which impacted PAT margin, attributing it to a one-time provision.

Asked by Vaibhav Shah

Solar project completion timeline and debt reduction Direct
So the debt of INR425 crores, which is yet we need to receive from this SPV -- from the lenders to SPV and in turn to SG is likely that around INR200-odd crores would be there by March followed by April because the entire commissioning has now been deferred till March because of the all local disturbances and the issues, which we already have faced, several other companies have faced.

Clarifies the delays in solar project commissioning and the expected timeline for debt reduction linked to SPV fund receipts, addressing liquidity concerns.

Asked by Vaibhav Shah

Impact of delayed LOA on HAM project margins Direct
No. Margins in any case are not going because we do -- these kind of projects do have price escalation. So anything from the base date would be added to this hit for the price escalation, be it negative or positive.

Reassures that project margins are protected by price escalation clauses even if LOA is delayed, mitigating concerns about profitability erosion.

Asked by Vaibhav Shah

CBI matter and its impact on operations Evasive
This is not any way related to this particular matter. But again, it's a matter is subjudice and whatever we update on the matter of updations would be given to the stock exchanges as a communication.

Management's response to the CBI search, while stating no operational impact and prior disclosure, was evasive regarding the reasons or employee involvement, leaving some ambiguity.

Asked by Vivek Joshi

Discussions with Adani Group for new projects Direct
Discussion is at the advanced stage. We have submitted our and there are twice the negotiation of the further terms and condition has been discussed. So one more bid or a few more bids also has been in advanced stage of discussion with Adani Group and one about group. These are all roads and rail.

Reveals potential significant new order inflows from a major private player (Adani Group), indicating future growth avenues beyond government tenders.

Asked by Bhavin Modi

3 min read 7 chapters

Detailed narrative

Q3 & 9MFY26 Financial Performance Overview

H.G. Infra Engineering reported standalone revenue of ₹1,450 crores for Q3 FY26, with an EBITDA margin of 15.5%. Standalone PAT for the quarter stood at ₹97 crores, reflecting a PAT margin of 6.7%, a decline from 9.1% in Q3 FY25. For the 9MFY26 period, standalone revenue reached ₹4,313 crores, with an EBITDA margin of 14.1% and PAT margin of 6.7%. Consolidated figures showed Q3 FY26 revenue at ₹1,421 crores, EBITDA margin at 21.7%, and PAT at ₹94 crores (6.6% margin), also down from 9.1% in Q3 FY25. The higher tax rate of 31.5% in Q3 was attributed to a ₹6 crore MSME provision.

Robust Order Book and Promising Pipeline

As of 3QFY26, the company's order book stood at a robust ₹13,624 crores, providing strong revenue visibility. This order book is well-diversified, with Roads & Highways contributing 64% (₹8,734 crores), Railways & Metro 20% (₹2,779 crores), Renewables 15% (₹1,620 crores from BESS and ₹394 crores from Solar & Transmission), and other sectors 1%. The company secured new projects worth ₹3,300 crores in 9MFY26 and is highly optimistic about adding another ₹4,000-5,000 crores by March '26. The bidding pipeline includes ₹14,000 crores in highway projects (EPC/HAM), ₹4,600 crores in railway projects, and BESS bids totaling approximately ₹8,000 crores.

Project Execution Updates Across Segments

Key project updates include near completion of the Ganga project (99%) with COD expected this quarter. The Jamshedpur elevated project is at 36.9% completion, and Neelmangala-Tumkur project reached 54.4%. In HAM projects, Karnal Ring Road is 94.2% complete, and Raipur-Visakhapatnam Corridor OD-5 and OD-6 have received provisional completion certificates. Khammam-Devarapalle Package-8 KD-1 and 2 are 99.1% and 96.9% complete, respectively, expected to finish in Q4 FY26. Railway projects like DMRC Metro (99%) and Bilaspur Himachal Pradesh Railway (87.8%) are targeting Q1 FY27 completion. Solar projects, despite 95.8% physical progress, faced delays due to monsoon and transmission line issues, pushing full commissioning to March/April '26.

Capital Allocation and Debt Management

The company invested approximately ₹305 crores in capex during the 9MFY26 period. Standalone gross debt stood at ₹1,945 crores, while consolidated gross debt was ₹6,032 crores with consolidated cash of ₹255 crores. To bridge a funding gap for solar projects, the company availed additional working capital limits, leading to a temporary increase in overall debt. Management expects this debt to reduce significantly upon receiving ₹425 crores from the solar SPV post-commissioning. The total equity requirement for 11 HAM projects is ₹1,750 crores, with ₹1,242 crores infused by December '25 and ₹117 crores scheduled for infusion in the next three months.

HAM Asset Monetization Progress

H.G. Infra Engineering is actively pursuing the monetization of its HAM assets. A binding offer document was executed with Neo Infra Income Opportunities Fund in August '25 for the divestment of five wholly-owned HAM subsidiaries. Security purchase agreements for all five projects were executed in the previous quarter. The company has received NOCs from lenders for Khammam-Devarapalle Package-1 and 2, and Raipur-Visakhapatnam project Package-5. Management anticipates completing the transaction for at least three projects within the current financial year, expecting to realize ₹500-600 crores as the first part of consideration.

Outlook and Future Strategy

The Union Budget 26-27 has strengthened the road sector with higher allocations, and the railway sector also received substantial capital outlay. H.G. Infra is strategically diversifying into new sectors like solar energy, transmission, and battery storage. The company has already executed over 350 MW in solar and has binding agreements for 735 MW/1,470 MWh BESS projects. Management expects to achieve ₹7,000 crores in revenue for FY27 and target new order inflows of ₹10,000-12,000 crores in FY27. Discussions with the Adani Group for new road and rail projects are also at an advanced stage.

CBI Matter and Operational Impact

Regarding the recent CBI matter, management confirmed that a search was conducted in their offices in January. They stated that necessary updates have been disclosed through stock exchanges and that there has been no impact on the company's operations and financial position. The matter is subjudice, and the company is extending full support to the agencies, promising further updates upon any material development.

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