Kalpataru Projects International Limited — Q3 FY26 earnings call

Call held 5 Feb 2026

Management summary

Kalpataru Projects International Limited delivered a strong Q3 FY26, marked by robust revenue growth, significant PBT margin expansion, and improved working capital. The company's balance sheet strengthened through asset monetization and debt reduction. While order inflows remain strong across T&D and B&F, challenges persist in the water business and Brazilian operations, with Fasttel recording substantial losses.

Highlights

  • Consolidated revenue for 9M FY26 grew 27% YoY to ₹19,365 crores, exceeding full-year guidance of 25%.

  • Consolidated PBT before exceptional items grew 69% YoY for 9M FY26, with margins expanding 110 bps to 4.6%.

  • Net working capital improved to 79 days at consol level and 97 days at standalone level, performing better than the year-end target of 100 days.

  • Secured INR 19,456 crores in YTD order inflows, with an additional INR 7,000+ crores in favorable position, on track for annual target of INR 26,000+ crores.

  • Successfully completed divestment of Vindhyachal Road asset (VEPL) in Jan 2026, generating net cash inflows exceeding INR 600 crores and reducing debt.

Concerns

  • Water business saw a decline in revenue in Q3 and 9M FY26, with collections improving but still a pain point.

  • Brazilian operations continue to suffer losses, though the historical order book is nearly completed with less than INR 100 crores remaining.

  • Fasttel reported an EBITDA loss of INR 63 crores in Q3 and INR 186 crores for 9M FY26, not meeting projections.

Key financials

2 periods

Headline

  • Consol Revenue
    ₹6,665 Cr
    YoY +16%
  • Consol Net Debt
    ₹2,240 Cr
    QoQ -29%
  • Consol NWC Days
    79 days

9M

  • Consol Revenue
    ₹19,365 Cr
    YoY +27%
  • Consol EBITDA Margin
    8.3%
  • Consol PBT Margin
    4.6%

What they filed

Q1 FY27: revenue up 8.8%, net profit up 31.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,136 4,826 6,204 5,040 5,419 +31%5,788 +20%6,964 +12%5,482 +9%
EBITDA348 402 523 428 447 +28%481 +20%672 +28%488 +14%
Net profit132 157 242 201 200 +52%211 +34%220 −9%265 +32%
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

  • T&D
    37% 9M Revenue Growth₹8,992 Cr 9M Revenue
  • B&F
    17% 9M Revenue Growth
  • Oil & Gas
    58% 9M Revenue Growth
  • Railway
    31% Q3 Revenue Growth15% 9M Revenue Growth
  • Urban Infra
    79% Q3 Revenue Growth

Order book

high confidence

Total value

₹63,287 Cr

as of 2025-12-31 quantified

Execution

provides significant revenue visibility for the quarters ahead, in excess of 2.5 years

Composition

Mix 3 segments
  • T&D 40.7%
  • B&F 29.4%
  • Railway 4.3%

Share of order book by segment· partial disclosure (74.4% of the book)

Pipeline

L1 awaiting loa

additional orders in favorable position

The company maintains robust business momentum, securing significant new orders and having strong visibility for the next 2-3 years, with a focus on better margins.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹700 Cr
    So for the current year, I think we had already taken approval of capex outflow of closer to INR 700-plus crores. We have already incurred capex outflow of INR 500-plus crores. So if you ask me for the current year, capex outflow should be in the range of INR 700 crores to INR 750 crores in terms of outflow. I believe that we should be in a similar range going forward also because we are seeing good traction across all our businesses.
  • Debt Net ₹2,240 Cr
    • Repayment Net cash inflows from VEPL divestment used for debt reduction ₹600 Cr
    Our net debt at both consol and standalone levels declined significantly, dropping by 29% and 16%, respectively, compared to the previous quarter. As of 31st December 2025, our consol net debt stands at INR 2,240 crores, while stand-alone net debt is at INR 1,849 crores.
  • M&A Vindhyachal Road asset (VEPL) Divestment · Closed · Consideration ₹[object Object] (undisclosed)

    Redeploy capital into core EPC businesses and enhance return ratios, reduce leverage and strengthen financial position.

    Net cash inflows exceeding INR 600 crores, and debt reduction of INR 190 crores taken over by acquiring entity, total impact closer to INR 800 crores.

    As a recent and significant update, we successfully completed the divestment of a 100% equity stake in the Vindhyachal Road asset in Jan '26. This transaction was based on an enterprise value of approximately INR 799 crores post-closing adjustments and has resulted in net cash inflows exceeding INR 600 crores for KPIL.
  • M&A Indore real estate project Divestment · Pending regulatory · Consideration ₹[object Object] (undisclosed)

    Full monetization to further reduce leverage and strengthen financial position.

    Expected to complete full monetization before end of March 2026, contributing to debt reduction.

    Looking ahead, we are on track to complete the full monetization of inventory in our Indore real estate project before the end of March 2026. ... As far as Indore is concerned, as of 31st December, we had an outstanding of approximately INR 75 crores. And we believe the entire amount should come in, maybe a few crores here and there should come in before March.
  • M&A Shubham Logistics Divestment · Announced

    Declared non-core, selling specific warehouses to reduce debt.

    Expected to contribute to debt reduction at consol level.

    We have Shubham Logistics, which we have declared as noncore, where also we are selling specific warehouses to reduce debt.
  • Liquidity Liquidity disclosed VEPL inflows and Indore monetization will further improve debt and working capital, ensuring financial agility.
    The debt numbers would further improve in Q4 given the inflows of Vindhyachal and normally healthy inflows in Q4. ... We are successfully reducing debt and maintaining an efficient net working capital, ensuring we remain financially agile without compromising on capex.

Guidance & targets

Revenue

  • Full Year Revenue Growth Revenue · FY26 · High confidence approx 25%
    We expect revenue growth for the full year to be approx 25%, accompanied by improvement in earnings of minimum 50 basis points at standalone and 100 basis points in consol.

    — Manish Mohnot

Profitability

  • Consol PBT Margin Improvement Profitability · FY26 · High confidence 100 bps
    We expect revenue growth for the full year to be approx 25%, accompanied by improvement in earnings of minimum 50 basis points at standalone and 100 basis points in consol.

    — Manish Mohnot

  • Standalone PBT Margin Improvement Profitability · FY26 · High confidence 50 bps

    — Manish Mohnot

EPS

  • Consol EPS EPS · Current Year · High confidence exceeding INR 50 per share
    Furthermore, we remain confident in reaching our target consol EPS exceeding INR 50 per share for the current year.

    — Manish Mohnot

Order Inflow

  • Annual Order Inflow Order Inflow · Annual · High confidence INR 26,000+ crores
    we are well positioned to meet our annual inflow target of INR26,000-plus crores.

    — Manish Mohnot

Working Capital

  • Net Working Capital Days Working Capital · FY26 · High confidence targeted
    We are well placed to achieve targeted net working capital and order inflows guided for the year.

    — Manish Mohnot

Growth Momentum

  • Growth Momentum Growth Momentum · Going forward · Medium confidence buoyant
    Lastly, we expect growth momentum to remain buoyant, supported by clear visibility in T&D, B&F and Civil businesses. ... we expect growth momentum to continue along with margin improvement in financial year 2027.

    — Manish Mohnot

T&D Order Inflow

  • Annual T&D Order Inflow Growth T&D Order Inflow · Next couple of years · Medium confidence at least 15-20%
    Going forward, next couple of years, I expect the inflows to increase by at least 15%, 20% on an annualized basis, if not more than that.

    — Manish Mohnot

Capex

  • T&D Capex Capex · Next year · High confidence INR 100-150 crores
    So if you ask me a number of INR 100 crores to INR 150 crores or max INR150 crores should be enough as far as capex on transmission is concerned for the next year.

    — Manish Mohnot

What to watch in Q4 FY26

Water Business Cash Flow Improvement

next quarter
Current Collections improving, but still a pain point
Target Significant improvement in Q4 collections

Why it matters

Improved cash flow from the water business is crucial for overall working capital and profitability, as it has been a drag.

Water should improve in Q4 and Brazil losses should start coming down at least consol level given that we have a lower order book there.

Risks & concerns

  • Fasttel significant losses

    high

    Fasttel incurred an EBITDA loss of INR 63 crores in Q3 and INR 186 crores for 9M FY26, failing to meet projections and identified as a setback.

    Management acknowledged

  • Water business collections and revenue decline

    medium

    Water business revenue declined in Q3 and 9M FY26, with collections improving but still a 'pain point' due to high outstanding amounts.

    Management acknowledged

  • Brazilian operations losses

    medium

    Brazilian operations continue to suffer, though the historical order book is nearly completed, and the company is reviewing its future strategy.

    Management acknowledged

  • Commodity price volatility (steel)

    low

    While most commodities are hedged, steel cannot be hedged and its price increases are managed by loading expected costs into tenders.

    Management acknowledged

  • Arbitration realization uncertainty

    low

    Management noted difficulty in assessing the timing and amount of realization from arbitration awards, despite having significant claims.

    Analyst acknowledged

Q&A highlights

6 direct
Consolidated vs. Standalone Performance Discrepancy Direct
One, water EBITDA is much lower than what it was in the previous year, driven by results driven by reasons. ... Second, in the previous year, we had our road assets with us, all the 3 of them, now it's only 2. ... And third, we continue to suffer on Brazilian operations as we are just closing some of our old projects...

Management explained the reasons for the difference between consolidated and standalone performance, attributing it to challenges in the water business, divestment of road assets, and losses from Brazilian operations.

Asked by Amit Anwani

Future Growth Outlook for FY27 Partial
I would come back with exact numbers in the April call, but yes, it would be definitely a very good growth with improved margins. This 2 commitment you can take.

Management confirmed expectations for strong growth and improved margins in FY27, but deferred specific numerical guidance to the next earnings call.

Asked by Amit Anwani

Pain Points and Legacy Order Book Impact on Profitability Direct
So Parikshit, first to answer the pain points. The pain points clearly where we exist today, one still continues to be water where our outstanding is in 4-digit crores, a very high number of crores. ... Second, from a pain point perspective, today, it's just the volatility in whatever is happening in exchange or whatever else, while we're 90% plus hedged...

Management identified the water business and exchange rate volatility as current pain points, while indicating that legacy orders with lower margins are mostly resolved, expecting overall margin improvement.

Asked by Parikshit Kandpal

Water Business Profitability and Margins Direct
The dent is only coming because of interest cost, interest costs typically with all those delays get hit at a project level. So at a gross margin level, the dent is minimal. If I was at whatever x level, it is maybe 100 basis points dent, not more than that. But the bigger dent comes out of interest cost. So that's where we're waiting and watching.

Management clarified that the margin impact from the water business is primarily due to interest costs from project delays, with minimal dent at the gross margin level, and expects improvement with better cash flows.

Asked by Parikshit Kandpal

Commodity Cost Inflation and Hedging Strategy Direct
on the commodity front, we have exposure primarily on aluminum, zinc, copper and steel. As of today, as per our risk management policy on aluminum, zinc and copper, we are 80% to 90% hedged, if not 95% plus hedged in some of them. ... At the steel level, we obviously cannot hedge steel because there isn't a market available for that. ... we have continuously loaded the steel increase expected cost into our tenders.

Management detailed its hedging strategy for key commodities (aluminum, zinc, copper) and explained how steel cost increases are managed by loading them into tender prices, mitigating margin risk.

Asked by Ashish Shah

Fasttel EBITDA Loss Direct
In Q3, Fasttel EBITDA loss is around INR 63 crores in Q3 itself. Yes. And total for 9 months around INR 186. This is one area where we believe against whatever we had projected for the year, this is one area where we have not been able to achieve on whatever projections we did.

Management provided specific figures for Fasttel's significant EBITDA losses, acknowledging it as a setback that did not meet internal projections.

Asked by Ashish Shah

T&D Order Book Capacity and Expansion Direct
As we stand today, we are at 90% plus capacity booked for the next year. And if I include the L1 orders, we are nearly fully booked. But the good part is capacity expansion in this business is very it's very simple. We have huge galvanizing capacity. So it's only about adding CNC machines, which takes 3-odd months, and you can easily increase your capacity to a higher level.

Management confirmed high capacity utilization for T&D for the next year and outlined the ease and simplicity of expanding capacity through adding CNC machines.

Asked by Parikshit Kandpal

2 min read 6 chapters

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.

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