Highway Infrastructure Limited — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Highway Infrastructure Limited reported a strong Q2 and H1 FY26 with significant growth in EBITDA and PAT, driven by improved margins. While revenue growth was modest, the company maintained a robust balance sheet with a low debt-to-equity ratio. Management highlighted a healthy order book and outlined strategic plans for future growth across its diversified infrastructure verticals.

Highlights

  • Q2 FY26 EBITDA significantly increased by 253% year-on-year to Rs. 13.7 crores.

  • H1 FY26 EBITDA grew by 102% year-on-year to Rs. 25.8 crores, achieving an 11.3% margin.

  • Q2 FY26 Profit After Tax (PAT) saw a substantial growth of 515% year-on-year to Rs. 9.7 crores.

  • H1 FY26 PAT grew by 192% year-on-year to Rs. 16.9 crores, with a 7.4% margin.

  • The company's debt-to-equity ratio improved to 0.28x, maintaining a strong balance sheet with net cash-on-cash equivalents of Rs. 52.8 crores.

Concerns

  • Q2 FY26 total revenue slightly declined by 3.43% year-on-year to Rs. 115.3 crores.

  • H1 FY26 total revenue showed marginal growth of 0.44% year-on-year to Rs. 227.8 crores.

Key financials

3 periods

Headline

  • Debt-to-Equity Ratio
    0.28×
  • Net Debt
    ₹60 Cr

Q2 FY26

  • Revenue
    ₹115.3 Cr
    YoY -3.4%
  • EBITDA
    ₹13.7 Cr
    YoY +253%
  • PAT
    ₹9.7 Cr
    YoY +515%

H1

  • FY26 Revenue
    ₹227.8 Cr
    YoY +0.44%
  • FY26 EBITDA
    ₹25.8 Cr
    YoY +102%
  • FY26 EBITDA Margin
    11.3%
  • FY26 PAT
    ₹16.9 Cr
    YoY +192%
  • FY26 PAT Margin
    7.4%

What they filed

Q1 FY27: revenue up 170.9%, net profit down 85.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue117 140 132 112 95 −19%127 −9%275 +108%303 +171%
EBITDA1 6 15 12 -7 −648%8 +25%14 −11%4 −67%
Net profit2 5 12 7 10 +516%6 +34%9 −27%1 −85%
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.

Capital allocation

high confidence
  • Debt Net ₹60 Cr
    • Repayment IPO funds will be utilized first for funding, implying debt reduction.
    Our balance sheet remained strong with debt-to-equity ratio at 0.28x and net cash-on-cash equivalents of Rs. 52.8 crores. Sir, current net debt is Rs. 60 crores as on 30th of September.
  • Liquidity Cash ₹52.8 Cr Company reports net cash-on-cash equivalents.
    Our balance sheet remained strong with debt-to-equity ratio at 0.28x and net cash-on-cash equivalents of Rs. 52.8 crores.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · FY27-28 · High confidence 8%-12%
    For EBITDA, we are expecting 8%-12% in FY27-28.

    — Saurabh Mittal

  • Overall Margin Profitability · near coming future · High confidence 10%-12%
    the company looks at a range of 10%-12% margin in the near coming future.

    — Riddharth Jain

Order Book

  • Order Book Value Order Book · end of this year (FY26) · High confidence Rs. 1,000 crores
    Our success ratio is approximately 25%. So, we are aggressively bidding. In the future, we are targeting to make an order book of Rs. 1,000 crores by the end of this year.

    — Saurabh Mittal

  • EPC Project Completion Order Book · within 2 years · High confidence Rs. 150-200 crores
    Of this, Rs. 150-200 crores worth of EPC projects are expected to be completed within 2 years.

    — Riddharth Jain

  • Order Work Inflows Order Book · next 2-3 months · High confidence Rs. 250 crores
    We anticipate an additional Rs. 250 crores in order work inflows over the next 2-3 months, supported by robust bid pipeline.

    — Riddharth Jain

  • Execution Timeline Order Book · for current order book · High confidence 18-24 months
    The order book execution, as I mentioned earlier also, that we have approximately an execution timeline of 18-24 months, approximately 1.5-2 years.

    — Riddharth Jain

  • Revenue Realization Velocity Order Book · from order book · Medium confidence 35%-40% in first 2 quarters, >65% in next 2 quarters
    In the first 2 quarters, we are realizing about 35%-40%. In the next 2 quarters, we are realizing more than 65%.

    — Riddharth Jain

Revenue Mix

  • EPC and Toll Revenue Ratio Revenue Mix · near future · Medium confidence 50-50
    But as a company we are eyeing at 50-50 ratio for EPC and toll in the near future.

    — Riddharth Jain

Commercial Real Estate

  • Annual Rental Income Commercial Real Estate · yearly · Medium confidence Rs. 15-20 crores
    To give you a very rough workup, I would like to mention that we are eyeing at something around Rs. 15-Rs. 20 crores yearly.

    — Riddharth Jain

What to watch in Q3 FY26

Order Work Inflows

next 2-3 months
Current Anticipated additional Rs. 250 crores
Target Confirmation of Rs. 250 crores in new order inflows

Why it matters

This is a short-term target for order book growth, crucial for future revenue visibility.

We anticipate an additional Rs. 250 crores in order work inflows over the next 2-3 months, supported by robust bid pipeline.

Q&A highlights

7 direct
EPC Project Qualification for NHAI Direct
We are qualified for approximately Rs. 200-Rs. 250 crores for one single project from NHAI.

Clarifies the company's capacity to bid for large-scale EPC projects from a key government agency.

Asked by Viral Shah

Toll Project Qualification Direct
For Toll, basically, given the total networth today I am qualified for about Rs. 1,000 worth of project for single contract.

Provides insight into the company's bidding capacity for toll collection contracts.

Asked by Viral Shah

Order Book Execution Timeline Direct
So, all of our projects are basically timed between 18-24 months. And so accordingly, you can understand the kind of execution that will come up.

Gives a clear timeframe for the realization of the current order book into revenue.

Asked by Ninad Sabnis

HAM Project Strategy Partial
It is not like HAM projects, all of the HAM projects are as good as they seem because the model is as good. So we can maximize the profit in HAM projects. Although,, now NHAI is also producing more BOT projects against HAM projects.

Explains the company's nuanced approach to HAM projects, considering evolving government models and profitability.

Asked by Ninad Sabnis

Medium-Term EBITDA Margin Target Direct
For EBITDA, we are expecting 8%-12% in FY27-28. And we are very comfortable with the number because going on, we have lower finance costs. We have better-looking opportunities with EBITDA margins.

Provides a specific, quantifiable long-term margin target and the rationale behind it.

Asked by Ninad Sabnis

Aspirational Order Book Target Direct
Our success ratio is approximately 25%. So, we are aggressively bidding. In the future, we are targeting to make an order book of Rs. 1,000 crores by the end of this year.

Sets a clear, short-term aspirational target for order book growth, indicating future revenue visibility.

Asked by Priyam Shah

Revenue Mix Shift Strategy Direct
But as a company we are eyeing at 50-50 ratio for EPC and toll in the near future.

Highlights a strategic shift in revenue composition, moving towards a more balanced portfolio between EPC and toll operations.

Asked by Priyam Shah

Commercial Real Estate Rental Income Outlook Direct
To give you a very rough workup, I would like to mention that we are eyeing at something around Rs. 15-Rs. 20 crores yearly.

Quantifies the expected recurring income stream from the emerging commercial real estate segment.

Asked by Aniesh

2 min read 5 chapters

Detailed narrative

Q2 and H1 FY26 Financial Performance Overview

Highway Infrastructure Limited reported a Q2 FY26 revenue of Rs. 115.3 crores, a slight decline of 3.43% YoY. However, EBITDA for Q2 FY26 surged by 253% YoY to Rs. 13.7 crores, and PAT increased by 515% YoY to Rs. 9.7 crores. For the first half of FY26, revenue was Rs. 227.8 crores (up 0.44% YoY), EBITDA grew by 102% YoY to Rs. 25.8 crores with an 11.3% margin, and PAT increased by 192% YoY to Rs. 16.9 crores, achieving a 7.4% margin. The company attributes the stronger H2 performance to the nature of its contracts, with 60-65% of revenue typically booked in Q3 and Q4.

Order Book Status and Outlook

As of September 2025, the company's order book stands at Rs. 775 crores, reflecting a 46% growth in H1 FY26. This includes Rs. 584 crores from EPC and Rs. 191 crores from Tollway projects. Management anticipates an additional Rs. 250 crores in order work inflows over the next 2-3 months and targets a total order book of Rs. 1,000 crores by the end of FY26. The current order book is expected to be executed over 18-24 months, with Rs. 150-200 crores worth of EPC projects slated for completion within 2 years.

Strategic Growth Pillars and Diversification

The company's growth strategy is anchored on four pillars, including strengthening existing business verticals and selective geographical expansion. Recent developments include commencing toll collection at Muzaina, initiating operations for a 4-lane Greenfield Expressway, and securing new EPC contracts worth Rs. 3.05 crores. The company is also expanding its real estate footprint with the launch of Neww York City Phase-IV in Indore, adding 0.17 million square feet of saleable area. Management aims for a 50-50 revenue mix between EPC and toll in the near future, adapting to government focus.

Balance Sheet Strength and Capital Allocation

Highway Infrastructure Limited maintains a strong balance sheet with a debt-to-equity ratio of 0.28x and net cash-on-cash equivalents of Rs. 52.8 crores. Current net debt as of September 30, 2025, is Rs. 60 crores. The company plans to utilize IPO proceeds first for funding future growth and debt reduction. Management emphasized financial prudence and a healthy cash position to support bidding and expansion, with return ratios of ROE at 19.1% and ROCE at 16.7% in FY25.

Margin Outlook and Commercial Real Estate Potential

Management expects to sustain and improve margins, targeting an overall margin range of 10%-12% in the near future and 8%-12% EBITDA margin for FY27-28. The commercial real estate segment is identified as an emerging area, expected to provide steady annuity-like revenue. The company is optimistically eyeing an annual rental income of Rs. 15-20 crores from its commercial real estate portfolio, leveraging strategically located land parcels and market maturation.

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