SRM Contractors Limited — Q3 FY26 earnings call

Call held 16 Feb 2026

Management summary

SRM Contractors delivered a strong Q3 FY26, showcasing robust revenue and profit growth driven by efficient execution and margin expansion. The company achieved significant operational milestones, including the completion of the Shyok Tunnel, and strategically expanded its capabilities through the acquisition of a 51% stake in Maccaferri Infrastructure Private Limited. While management revised its FY27 consolidated revenue guidance to a more prudent INR1,500 crores and adjusted order book backlog timelines, it maintains a healthy bid pipeline and expects continued margin sustainability.

Highlights

  • Revenue of ₹231 crores, up 50% YoY, demonstrating robust growth.

  • EBITDA surged to ₹45 crores, up 72% YoY, with margin expanding to 19% from 17% in the same quarter last year.

  • PAT reached ₹24 crores, up 51% YoY, with EPS at ₹10.5 per share, mirroring the strong performance.

  • Completed India's longest high-altitude precast cut-and-cover tunnel (Shyok Tunnel) and India's tallest reinforced soil wall at Reasi.

  • Acquired 51% stake in Maccaferri Infrastructure Private Limited (MIPL), enhancing specialized geotechnical capabilities and expanding market reach.

Concerns

  • FY27 consolidated revenue guidance revised downwards from 'INR2,000 crores plus' to 'INR1,500 crores plus' for prudence.

  • Order book backlog expectation for INR2,000 crores shifted from 'mid-Feb or early March' to 'June' due to a focus on cherry-picking projects.

  • Management was evasive regarding a comparison with 'Brahmaputra Infrastructure' on margins and order updates.

Key financials

  1. Revenue ₹231 Cr +50%YoY
  2. EBITDA ₹45 Cr +72%YoY
  3. EBITDA Margin 19%
  4. PAT ₹24 Cr +51%YoY
  5. EPS ₹10.5 +51%YoY

What they filed

Q1 FY27: revenue up 4.9%, net profit up 23.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue95 150 227 143 192 +102%203 +35%312 +37%150 +5%
EBITDA15 23 34 21 28 +87%37 +61%50 +47%33 +57%
Net profit9 14 23 13 19 +111%19 +36%34 +48%16 +23%
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.

Order book

high confidence

Total value

₹1,400 Cr

as of 2025-12-31 quantified

Execution

The project cycle is two years maximum. If I have even INR2,000 I have -- then I have enough work for next year also.

Composition

Mix 3 segments
  • Roads and Bridges 67.1%
  • Tunnel Projects 9.9%
  • Slope Stabilization Works 24.6%

Share of order book by segment

Pipeline

L1 awaiting loa

Bid pipeline for FY26

Management is focused on disciplined execution and cherry-picking projects for better margins, aiming for a strong order book while maintaining profitability.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹100 Cr
    In first nine months of '26, we have incurred a capex of INR78 crores and plan to further incur capex of INR90 crores to INR100 crores in financial year '26.
  • Debt Debt disclosed
    Sir, our net debt level on the consolidated level is 0.14.
  • M&A Maccaferri Infrastructure Private Limited Acquisition · Closed

    Strengthens leadership in slope stabilization, rockfall protection, and advanced geotechnical solutions; provides a strategic platform for international market evaluation.

    Consolidated from October 21, 2025, contributing INR31 crores in Q3 revenue. MIPL operates on similar margins (10% PAT, 16-17% EBITDA).

    A pivotal step in our strategic roadmap has been the acquisition of 51% stake in Maccaferri Infrastructure Private Limited. This partnership with a subsidiary of Italy-based Officine Maccaferri strengthens our leadership in slope stabilization, rockfall protection, and advanced geotechnical solutions.
  • Liquidity Undrawn ₹318 Cr Total bank guarantee limit is INR500 crores, with INR182 crores utilized, leaving INR318 crores unutilized.
    Actually it is if we add SBI, the latest sanction, it will be around INR500 crores of bank guarantee limits. ... INR182 is utilized only.

Guidance & targets

Revenue

  • Standalone Revenue Revenue · FY26 · High confidence INR800-900 crores
    For 26, we have given a standalone of INR800 to INR900

    — Sanjay Mehta

  • Consolidated Revenue Revenue · FY26 · High confidence INR1,000 crores plus
    and a consolidated of maybe INR1,000 plus.

    — Sanjay Mehta

  • Consolidated Revenue Revenue · FY27 · High confidence INR1,500 crores

    Previously INR2,000 crores plus → INR1,500 crores

    And in 27, INR1,500 is a prudent figure.

    — Sanjay Mehta

  • MIPL Total Turnover Revenue · FY26 · High confidence INR275-350 crores
    275 to 350 is Puneet saying, Yes. So that is what I said to 250 to 300 we are expecting. This will be the total turnover of MIPL.

    — Sanjay Mehta

  • MIPL Revenue Revenue · FY27 · High confidence INR400-500 crores
    '27 will be in the range of INR400 crores to INR500 crores.

    — Sanjay Mehta

Order Book

  • Total Order Book Order Book · FY26 end · High confidence more than INR2,000 crores
    before end of this financial year, our order book will be more than INR2,000 crores.

    — Sanjay Mehta

  • Total Order Book Order Book · June '26 end · High confidence around INR3,000 crores
    order book in the next quarter by the end of June '26 should be around INR3,000 crores.

    — Sanjay Mehta

  • Conversion Rate (Slope) Order Book · High confidence more than 50%
    my conversion will be more than 50% here.

    — Sanjay Mehta

  • Conversion Rate (Road) Order Book · High confidence 10-20%
    In road, it can be 10%, it can be 20%

    — Sanjay Mehta

Profitability

  • PAT Margins Profitability · FY27 · High confidence 10-11%
    We will be continuing with the same trend... So will continue with the same trend of PAT and EBITDA. You will not see any change for next year also. It can increase, it will not decrease. ... Yes, of course, definitely. We are looking for the same bracket.

    — Sanjay Mehta

  • EBITDA Margins Profitability · FY27 · High confidence 19%
    We will be continuing with the same trend... So will continue with the same trend of PAT and EBITDA. You will not see any change for next year also. It can increase, it will not decrease.

    — Sanjay Mehta

Fundraise

  • Equity Fundraise Fundraise · Post-March · High confidence INR100-130 crores
    It will be something INR100 crores to INR130 crores. It can be anything in this bracket.

    — Sanjay Mehta

What to watch in Q4 FY26

Order Book by FY26 End

FY26 end
Current INR1,400 crores as of Dec 2025
Target More than INR2,000 crores

Why it matters

Verifies the company's ability to secure new orders and expand its backlog as guided.

before end of this financial year, our order book will be more than INR2,000 crores.

Risks & concerns

  • Order Book Growth vs. Margin Preservation

    medium

    Management emphasizes a strategy of 'cherry-picking' projects to maintain margins, which may lead to slower order book growth compared to aggressive expansion.

    Management acknowledged

  • MIPL Integration and Performance

    medium

    The 51% stake acquisition in MIPL is strategic, but its full financial impact and integration success, particularly in achieving revenue targets (INR275-350 cr for FY26, INR400-500 cr for FY27) and maintaining improved working capital, are ongoing.

    Management actively managing

  • Geographical Concentration

    low

    While expanding, the company's legacy is rooted in Jammu & Kashmir and Ladakh, indicating a historical concentration, though new projects in Maharashtra, Gujarat, and Uttarakhand are diversifying this.

    Management addressing

Q&A highlights

7 direct, 1 evasive
Order book growth and future inflows Direct
before end of this financial year, our order book will be more than INR2,000 crores. And of course we have a pipeline of more than INR4,000 crores and in the coming months also we are going to bid for that. So order book in the next quarter by the end of June '26 should be around INR3,000 crores.

Clarified the company's order book growth trajectory and pipeline visibility, addressing concerns about flat order book.

Asked by Aman Baheti

FY27 Consolidated Revenue Guidance Revision Direct
No, no. We are trying to be more prudent only. But this is what like we are closing our '26, so I told you it will be more than INR1,000, it will be something near INR1,100 also. And in 27, INR1,500 is a prudent figure.

Revealed a downward revision in the FY27 consolidated revenue guidance, indicating a more conservative outlook.

Asked by Chirag Shah

Maccaferri (MIPL) Consolidation and Financial Contribution Direct
We consolidated from 21st of October onwards because that was the day when final acquisition happened as per the company law. So we've consolidated on that... we have INR31 crores in revenue. That is the Q3 portion of revenue that we've included... in MIPL as well we operate on a similar margin of 10% PAT and 16% to 17% of EBITDA.

Provided specific financial details on MIPL's Q3 contribution and margin profile, clarifying its immediate impact post-acquisition.

Asked by Rehan

MIPL Working Capital Cycle Improvement Direct
The 5 to 6 months working capital was due to the reason that MIPL was working maximum for the private companies... But now we have shifted from private players to 80% to 90% government orders. So it's the same as we do in SRM. ... this working cycle remains same as in case of SRM, which is 60 days.

Addressed concerns about MIPL's historical high working capital, explaining the improvement post-acquisition due to a shift towards government orders.

Asked by Vansh Solanki

International Expansion Strategy and Margins Direct
The margins here will be better than what we are doing in India. That's why we have decided to move one arm here, but we are not going to give any figures as of today, because we are as I told we are negotiating with number of international players. So let something mature then only we will be in a position to give you a figures.

Outlined the rationale for international expansion (better margins) and confirmed initial steps like setting up an Abu Dhabi office, while deferring specific financial targets.

Asked by Maitri Shah

Bank Guarantee Limits and Utilization Direct
Actually it is if we add SBI, the latest sanction, it will be around INR500 crores of bank guarantee limits. ... INR182 is utilized only.

Provided clarity on the company's available and utilized bank guarantee limits, indicating sufficient headroom for future projects.

Asked by Rutu Chavan

HAM Project Bidders and Costs Direct
We have bidded for two projects. Both projects cost is around INR900 crores. In Package 3, one bidder is SRM and the second one is Afcons. And in Package in Package 6, one is Shreeji Infraspace and one is SRM.

Provided specific details on the HAM projects bid for, including their value and the competitive landscape, offering insight into future potential wins.

Asked by Chirag Shah

Comparison with 'Brahmaputra Infrastructure' on Margins Evasive
Brahmaputra, I don't know anything about Brahmaputra Infrastructure, man.

Management's evasive response to a direct question about a competitor's higher margins and order updates, suggesting a lack of detailed competitive analysis or unwillingness to discuss.

Asked by Akhilesh

2 min read 6 chapters

Detailed narrative

Robust Q3 FY26 Financial Performance

SRM Contractors delivered a strong Q3 FY26, with revenue scaling to INR231 crores, marking a robust 50% year-over-year growth. EBITDA surged by an exceptional 72% YoY to INR45 crores, expanding the margin to 19% from 17% in the prior year. Net profit reached INR24 crores, a 51% YoY increase, with EPS accelerating by 51% to INR10.5 per share, significantly outperforming previous guidance and most peers in the infrastructure sector.

Strategic Expansion and Maccaferri Acquisition

The company expanded its geographical footprint with new project wins in Maharashtra (Palghar), Gujarat, and Uttarakhand, aiming to diversify its order book and reduce concentration. A pivotal strategic move was the acquisition of a 51% stake in Maccaferri Infrastructure Private Limited (MIPL), which strengthens SRM's leadership in slope stabilization, rockfall protection, and advanced geotechnical solutions. MIPL's Q3 FY26 revenue, consolidated from October 21, 2025, contributed INR31 crores, with its 9M standalone revenue at INR90 crores, and full-year FY26 revenue expected at INR275-350 crores.

Order Book and Pipeline Outlook

As of December 2025, the order book stood at INR1,400 crores, comprising INR940 crores from roads and bridges, INR139 crores from tunnels, and INR344 crores from slope stabilization works. The company reported order inflows of INR329 crores for the first nine months of FY26 and maintains a robust bid pipeline of over INR4,000 crores. Management expects the order book to exceed INR2,000 crores by FY26 end and reach approximately INR3,000 crores by June 2026, driven by ongoing bidding activities including a significant HAM project of INR550 crores.

Financial Guidance and Margin Sustainability

For FY26, standalone revenue is guided at INR800-900 crores, with consolidated revenue projected at over INR1,000 crores. The FY27 consolidated revenue guidance has been prudently revised to over INR1,500 crores, reflecting a cautious approach to growth. Management anticipates sustaining PAT margins in the 10-11% range and EBITDA margins around 19%, attributing this to disciplined execution, cherry-picking of high-margin projects, and the benefits of infused capex.

Capital Expenditure and Funding Plans

SRM Contractors incurred a capex of INR78 crores in 9M FY26, with a full-year FY26 plan of INR90-100 crores, and an additional INR100 crores planned for the next financial year. The company's consolidated net debt-to-equity ratio stood at a healthy 0.14 as of Q3, indicating a strong balance sheet. To support future growth and expansion, an equity fundraise of INR100-130 crores is planned post-March, with management confirming it will be a preferential issue.

Operational Achievements and Capabilities

The company highlighted significant operational achievements, including the completion of India's longest high-altitude precast cut-and-cover tunnel (Shyok Tunnel) at over 12,000 feet altitude and the tallest reinforced soil wall in Reasi. These projects earned the company the ET Infra Leadership Award 2025 for the second consecutive year, underscoring its specialized capabilities in challenging terrains and high-entry barrier segments. The self-reliant operating structure, supported by in-house design and engineering, enables tight control over quality, cost, and timelines.

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