Highway Infrastructure Q4 FY26 earnings call

Highway Infrastructure Limited reported a strong financial performance for FY26, with total income reaching INR 633.4 crores, marking a 25.6% year-on-year increase. EBITDA grew by 28.4% to INR 51.5 crores, and PAT saw a significant jump of 42.0% to INR 31.8 crores. The company maintained a robust balance sheet with a debt-to-equity ratio of 0.45x and achieved an 18.4% return on equity.

The company operates across three main business verticals: Tollway collection, EPC infrastructure, and Real Estate. In FY26, Tollway collection was the primary revenue contributor at 73.7%, followed by EPC infrastructure at 19.8%, and Real Estate at 6.5%. Management highlighted Tollway collection as a key growth driver, supported by differentiated capabilities and a technology-enabled operating model focused on efficiency and leakage control.

Highway Infrastructure emphasized its disciplined approach to growth, prioritizing return thresholds and margin quality over scale. This was demonstrated by securing the Kaza Fee Plaza project in Andhra Pradesh, valued at INR 328.8 crores, while simultaneously withdrawing from the Venkatapalam Fee Plaza opportunity, incurring a INR 26.33 lakh penalty, and handing over the Katiyara Fee Plaza in Bihar due to commercial unattractiveness. This selectivity ensures focus on long-term value creation.

The broader industry backdrop remains supportive, with the government allocating INR 3.1 lakh crores to the Ministry of Road Transport and Highways for FY27. The company views the gradual rollout of Multi-Lane Free Flow (MLFF) tolling as a long-term positive, as it is expected to improve traffic flow, reduce leakage, and enhance user experience. Management believes MLFF reduces operator risk and positions the company favorably due to its technology-focused approach.

Beyond existing verticals, HIL is exploring adjacent infrastructure opportunities, including wayside amenities and ropeway projects. Wayside amenities, driven by NHLML, offer long-term contracts (5-30 years) and monetization potential through commercial leasing and hospitality-linked assets. Ropeway projects under the Parvatmala Pariyojana are also seen as a credible new segment, offering EPC and operational opportunities, particularly in remote and tourist areas.

The company closed FY26 with a record order book of INR 1,143 crores, providing strong revenue visibility for coming periods. This includes INR 591.3 crores of balance EPC works and INR 526.1 crores of Tollway Collection balance value. For FY27, the company expects total revenue of INR 900 crores (INR 200 crores from EPC, INR 700 crores from Toll), and for FY28, INR 1,200 crores (INR 300 crores from EPC, INR 900 crores from Toll).

Management addressed an increase in receivables, stating that approximately INR 27 crores of the total INR 65 crores in 2026 were billed in March and are realizable within the next three months, indicating a timing issue. The company remains focused on margin discipline, working capital efficiency, and selective bidding to convert its order book into profitable growth. EPC margins are 13-14%, Toll segment margins are 7%, and Real Estate margins are approximately 50%.