Highway Infrastructure Limited

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.

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.

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.

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.

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.