Detailed Narrative
Q3 FY26 Performance Exceeds Guidance
Kalpataru Projects International Limited reported a strong Q3 FY26, with consolidated revenue growing 16% YoY to INR 6,665 crores. For the nine-month period (9M FY26), consolidated revenue rose 27% YoY to INR 19,365 crores, already surpassing the full-year guidance of 25% revenue growth. Standalone revenue also demonstrated robust growth, increasing 20% YoY in Q3 and 28% YoY for 9M FY26, driven by strong execution and a healthy order backlog.
Profitability and Working Capital Improvement
The company achieved significant profitability improvements, with consolidated PBT before exceptional items📎 growing 37% YoY in Q3 and a robust 69% YoY for 9M FY26. Consolidated PBT margins expanded by 110 bps to 4.6% for 9M FY26, exceeding the guidance of 100 bps improvement. Furthermore, net working capital days improved by 15 days, reaching 79 days at the consolidated level and 97 days at the standalone level, outperforming the year-end target of 100 days.
Strong Order Book and Pipeline
KPIL's consolidated order book stood at a robust INR 63,287 crores as of December 31, 2025, providing over 2.5 years of revenue visibility. Year-to-date order inflows reached INR 19,456 crores, with an additional INR 7,000+ crores in favorable position (L1 bids), positioning the company well to meet its annual inflow target of INR 26,000+ crores. The T&D order backlog grew 12% YoY to INR 25,752 crores, and the B&F order book surged 40% YoY to INR 18,596 crores.
Balance Sheet Strengthening Through Asset Monetization
The company significantly strengthened its balance sheet, with consolidated net debt declining 29% QoQ to INR 2,240 crores as of December 31, 2025. This was bolstered by the successful divestment of the Vindhyachal Road asset (VEPL) in January 2026, which generated net cash inflows exceeding INR 600 crores and included the acquiring entity taking over INR 190 crores of debt. KPIL is also on track to fully monetize its Indore real estate project (INR 75 crores outstanding) by March 2026 and is selling specific warehouses from Shubham Logistics to further reduce debt.
Segmental Performance and Challenges
While T&D, B&F, and Oil & Gas segments showed strong growth (37%, 17%, and 58% YoY for 9M FY26 respectively), the water business experienced a revenue decline in Q3 and 9M FY26, though collections are improving. Brazilian operations continue to be a drag with losses, but the historical order book is nearing completion. Fasttel reported significant EBITDA losses of INR 63 crores in Q3 and INR 186 crores for 9M FY26, failing to meet projections, prompting a review of its future strategy.
Capital Expenditure and Commodity Risk Management
Capex for 9M FY26 was over INR 500 crores, with a full-year target of INR 700-750 crores, and similar levels expected for the next year. The company manages commodity cost inflation by hedging 80-95% of its exposure to aluminum, zinc, and copper. For steel, which cannot be hedged, expected cost increases are loaded into tender prices, ensuring margin protection.