Detailed Narrative
Strong Q2 Performance and H1 Overview
PSP Projects reported Q2 FY26 revenue of ₹694 crores, a 20% YoY increase, and a 35% QoQ growth, driven by improved execution and labor availability post-monsoon. For the first half, revenue stood at ₹1,206 crores, marking a 1.38% YoY increase. EBITDA grew 24% YoY to ₹48 crores, with the margin expanding to 6.93%, and net profit increased 33% YoY to ₹15 crores. The company also achieved a world record for a continuous concrete pour for the Vishv Umiya Dham Temple foundation.
Robust Order Book and Inflow
As of September 30, 2025, the company's order book stood at ₹9,883 crores, reflecting a 51% YoY growth. Order inflow for Q2 FY26 was ₹4,011 crores (excluding GST), with total inflow reaching ₹4,118 crores by October 17, 2025. Adani Group projects constitute 56% of the current order book, providing significant future visibility. The company's bid book currently includes approximately ₹8,500 crores, with ₹7,000 crores from Adani Group and ₹1,300 crores from non-Adani projects.
Strategic Adani Partnership and Future Outlook
The Adani partnership is expected to generate substantial order inflow, with Adani Group planning over ₹2 lakh crores in CAPEX over the next 1.5-2 years. The partnership offers favorable contract conditions, including a 10% mobilization advance and payments approved within 7 days for 75% and a maximum of 30 days for the remaining 25%. These terms are anticipated to significantly reduce debt and minimize working capital for PSP Projects. Management projects a total order book of ₹14,000-15,000 crores by March 2026 if the Adani pipeline materializes.
Profitability and Working Capital Dynamics
The EBITDA margin of 6.93% in Q2 FY26 was impacted by heavy monsoon, which management estimates prevented an additional ₹100 crores in revenue. Management expects margins to stabilize at 8-9% in H2 FY26 and next year. The working capital cycle increased to 102 days from 65 days last year, primarily due to stretched payments from certain government projects. This led to an increased ECL provision of ₹3.64 crores in Q2 FY26, based on Ind AS formula for receivables exceeding 60/90 days, with a total accumulated ECL of ₹30 crores.
Capex and Precast Operations
Q2 FY26 capital expenditure was ₹41 crores, bringing the H1 total to ₹80 crores. For FY26, CAPEX is guided to be 4-4.5% of revenue, an increase from the initial 3-4% due to investments in high-value cranes for precast operations. The company has sufficient existing precast capacity for 5 units, with four Adani projects slated to utilize precast elements. One precast project is expected to start next month, with three more by December in Shantigram.
Project Delays and Challenges
Several projects are facing delays, including the ₹140 crore GMC project due to land acquisition issues and the Dharoi Dam project with two pending land acquisition components expected by November 2025. Mumbai projects, such as Dharavi, are experiencing substructure delays due to complex sheet piling and excavation work. Additionally, a payment of ₹90 crores from SDB is still pending, though interest has been agreed upon, the timing of📎 recovery remains uncertain as SDB struggles with office sales.
Revenue and Order Inflow Guidance
The company targets a full-year FY26 order inflow of approximately ₹11,000 crores (₹4,000 crores already won plus ₹7,000 crores in pipeline). Management expects H2 FY26 revenue of ₹2,000 crores, leading to a full-year revenue of around ₹3,200 crores. For FY27, revenue is guided to exceed ₹4,000 crores, with fresh order inflow expected to be in a similar range as FY26, depending on group CAPEX and project stabilization.