Detailed Narrative
Q2 & H1 FY26 Performance Overview
SPML Infra reported H1 FY26 revenue of INR 363 crore, with an EBITDA of INR 35 crore (9.8% margin) and PAT of INR 27 crore (7.6% margin). For Q2 FY26, revenue stood at INR 199 crore, marginally up 2% YoY, with EBITDA at INR 20 crore (10% margin) and PAT at INR 15 crore (7.7% margin). These margins are in line with the guided range, reflecting stable operational performance despite a seasonally slower period for infrastructure companies.
Order Book and Future Visibility
The company secured new projects totaling INR 3,772 crore in H1 FY26 across water infrastructure. It currently holds an existing order book of INR 1,600 crore and is in an L1 position for tenders worth INR 1,125 crore, expected to be awarded in the current fiscal year. Management targets a new order book of INR 5,000 crore for the current financial year, with a total pipeline of INR 25,000 crore in tenders, including INR 5,000 crore in BESS, providing clear revenue visibility.
Financial Stability and Capital Access
SPML Infra has strengthened its financial position, with sanctioned bank facilities enhanced from INR 205 crore to INR 505 crore by a leading public sector bank, underscoring lender confidence. The company also received approval for a Surety Bond, providing additional bidding flexibility. It expects to receive approximately INR 150 crore from warrant conversions by March, further improving liquidity and ensuring no pressure on operating cash flows.
BESS Project Update and Strategy
The 2.5 GWh Phase I Battery Energy Storage Systems (BESS) facility at Pune MIDC is progressing on schedule and is targeted for commissioning by Q1 FY27, with Phase II to follow by FY28. SPML Infra aims for an end-to-end turnkey integration model for BESS, targeting 10% EPC margins, which could increase to 14-15% with component manufacturing. The company plans to achieve a 50:50 revenue mix between water/power and BESS by 2029 or 2030, leveraging its power EPC expertise.
Arbitration Claims and Liquidity
The company has an arbitration award of approximately INR 645 crore (including interest up to October 2025), which is expected to cover the remaining INR 400 crore debt owed to NARCL. Additionally, SPML Infra has claims worth INR 4,600 crore, with historical conversion rates suggesting a potential for further INR 1,500 crore in awards within the next two years. New government schemes like Vivad Se Vishwas are expected to expedite the realization of these awards, providing significant future liquidity.
Margin Outlook and Project Mix
While legacy orders continue to have comparatively lower margins (5-7%), the newly secured orders carry significantly higher margins, exceeding 10%. The growing contribution from these new, higher-margin projects, along with the capitalization of BESS project expenses until commercial production, is expected to meaningfully enhance overall profitability from Q3 FY26 onwards. The company's disciplined approach focuses on selective bidding and strong project execution to sustain healthy margins.