Transrail Lighting Limited — Q3 FY26 earnings call

Call held 3 Feb 2026

Management summary

Transrail Lighting Limited delivered a strong Q3 and 9M FY26, marked by robust revenue growth of 32% and 49% respectively, and healthy EBITDA margins. The company significantly strengthened its balance sheet by reducing net debt and improving working capital. With a substantial effective order book of ₹18,216 crores and a positive outlook for the T&D sector, Transrail is well-positioned for future growth, despite some project execution challenges leading to conservative near-term guidance.

Highlights

  • Q3 Revenue from operations grew 32% YoY to ₹1,796 crores, reflecting strong execution momentum.

  • 9M Revenue from operations grew 49% YoY to ₹5,017 crores, demonstrating broad-based growth.

  • Q3 EBITDA margins stood at 12.7%, with absolute EBITDA growing 27% YoY to ₹228 crores, indicating stable operating performance.

  • Net debt reduced to ₹463 crores (from ₹703 crores in H1 FY26), with debt-equity ratio at 0.39x and net debt-to-EBITDA at 0.57x, strengthening the balance sheet.

  • Working capital days improved to 83 days from 91 days in FY25, and cash equivalents increased by ₹293 crores over H1 to ₹380 crores.

Concerns

  • One-time exceptional item of ₹17 crores for statutory expenses related to new Labor Codes.

  • Conservative revenue guidance for FY26 (26-27% plus) due to some ROW issues, forest issues in domestic projects, and international project issues.

  • Subcontracting expenses remained elevated in Q3 due to higher execution, though expected to normalize.

Key financials

3 periods

Headline

  • Working Capital Days
    83 days

Q3 FY26

  • Revenue
    ₹1,796 Cr
    YoY +32%
  • EBITDA
    ₹228 Cr
    YoY +27%
  • EBITDA Margin
    12.7%
  • Operating PBT
    ₹169 Cr
    YoY +34%
  • Operating PAT
    ₹127 Cr
    YoY +36%

9M FY26

  • Revenue
    ₹5,017 Cr
    YoY +49%
  • EBITDA
    ₹614 Cr
    YoY +40%
  • EBITDA Margin
    12.2%
  • Operating PBT
    ₹441 Cr
    YoY +52%
  • Operating PAT
    ₹324 Cr
    YoY +62%
  • Interest Cost as % of Revenue
    3.3%
  • ROCE
    25.3%

What they filed

Q1 FY27: revenue up 4.6%, net profit up 1.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,088 1,358 1,946 1,660 1,561 +43%1,796 +32%1,863 −4%1,736 +5%
EBITDA138 179 236 199 184 +33%227 +27%207 −12%202 +2%
Net profit55 93 127 106 91 +65%110 +18%96 −24%108 +2%
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

₹18,216 Cr

as of 2025-12-31 quantified

Inflow this quarter

₹1,396 Cr

Composition

Mix 4 geographies
  • Domestic (Order Inflow 9M) 55%
  • International (Order Inflow 9M) 45%
  • Domestic (Order Book) 57%
  • International (Order Book) 43%

Share of order book by geography· categories overlap, and sum to 200%

Pipeline

L1 awaiting loa

L1 position awaiting conversion

The company maintains a strong and diversified order book, with healthy domestic and international contributions, providing good revenue visibility.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed internal accruals and money received from the IPO
    • Doubling capacity over towers and conductors
    • Greenfield facility expansion
    Our phase-wise CAPEX remains in track and effectively doubling our capacity over towers and conductors and will significantly strengthen our manufacturing backbone to support our project and the growth in future. ...the CAPEX was funded by internal accruals and money received from the IPO as well.
  • Debt Net ₹463 Cr · 0.6× EBITDA
    our net debt stood at Rs. 463 crores, with debt-equity ratio on just 0.39x, reflecting prudent capital allocation, controlling working costs deployed. ...Our net debt reduced to Rs. 463 crores from Rs. 703 crores in H1, Financial Year '26 and our debt-to-EBITDA ratio stood at 0.57x
  • Liquidity Cash ₹380 Cr Cash equivalent for 9 months, increased by ₹293 crores over H1.
    Cash equivalent stood at Rs. 380 crores for 9 months, increase of Rs. 293 crores over H1, supported by improved cash flows.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · Medium confidence 26%-27% plus

    Previously 24%-25% → 26%-27% plus

    On the revenue front, we had improved our guidance from 24%-25% to 26%-27%. And we have seen good execution momentum post monsoons because if you remember, the monsoons were pretty heavy in India this year. So, we are hopeful to maintain the 27% plus guidance and we are stretching to see if we can do more.

    — Randeep Narang

Order Inflow

  • Order Inflow Order Inflow · FY26 · High confidence Rs. 9,500 crores - Rs. 10,000 crores
    As we mentioned, the order intake with Rs. 5,100 odd crores plus the L1 of Rs. 3,483 crores, we will cross the last year's boundaries to Rs. 9,500 crores - Rs. 10,000 crores.

    — Randeep Narang

Order Intake

  • Order Intake from Tendering Opportunity Order Intake · FY27 · Medium confidence 10% to 14%
    Next year again, I said, 12 months we have a good Rs. 1 lakh crores of, tendering opportunity, which we will look at a 10% to 12%, maybe even 13%, 14% order intake.

    — Randeep Narang

Growth

  • Overall Growth Growth · Next couple of years · High confidence 20%-25%
    Our growth, as we had already planned, we are looking at 20%-25% growth going forward in the next couple of years.

    — Randeep Narang

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 11.5% to 12%
    we are comfortable to maintain our EBITDA profile of 11.5% to 12%. In fact, 12% is what we are talking about.

    — Randeep Narang

What to watch in Q4 FY26

Brownfield CAPEX Phase 1 Completion

Next quarter (Q4 FY26)
Current 70% production started
Target 100% production by Feb end 2026

Why it matters

Full commissioning of brownfield CAPEX is crucial for doubling capacity and supporting future growth.

70% of our brownfield (Phase 1) has already started production. And we are hopeful that the complete 100% will happen by Feb end.

Risks & concerns

  • Project Execution Delays (ROW/Forest)

    medium

    Some ROW issues, forest issues in domestic projects, and international project issues are leading to conservative revenue guidance.

    Management acknowledged

  • Elevated Subcontracting Expenses

    low

    Subcontracting expenses remained elevated in Q3 due to higher execution, but are expected to normalize as high-priority jobs complete.

    Analyst acknowledged

  • Raw Material Price Volatility (Steel)

    low

    Steel softening over the last six months is not expected to impact margins, and the company uses contingencies and careful cost marking for EPC projects.

    Analyst downplayed

Q&A highlights

6 direct
Order Inflow and Execution Growth Direct
So, I think that is a good question, the core question. As we mentioned, the order intake with Rs. 5,100 odd crores plus the L1 of Rs. 3,483 crores, we will cross the last year's boundaries to Rs. 9,500 crores - Rs. 10,000 crores. We also have already bid for around another Rs. 15,000 odd crores of jobs, which we are assuming the results will come in the next two months. So, we are quite confident that our order intake plan will be as per the AOP we planned and the guidance we have given.

Analyst sought clarity on future growth drivers; management provided specific order intake targets for current and next fiscal years, reinforcing confidence in growth trajectory.

Asked by Pritesh from Lucky Investments

International Execution Performance Partial
Well, I don't tend to agree, because our revenue from execution in international is stable. It is, in fact, there is a growth of 30% over last year for the 9-month period. So, we are good in terms of international execution.

Analyst perceived a slowdown in international execution; management clarified that 9M international revenue grew 30% YoY, indicating a different perspective on performance.

Asked by Naman Parmar

CFO-to-EBITDA Conversion Direct
If you see, my profit before tax for this 9 month has been Rs. 430 crores and whereas my cash flow from generation is more than Rs. 440 crores. So, it is not 25% to 30%. It is substantially higher than that.

Analyst questioned the company's CFO-to-EBITDA conversion ratio compared to peers; management provided specific figures showing strong cash flow generation exceeding PBT for the 9-month period.

Asked by Shubhankar Gupta from Equitree Capital

Labor Code Changes Impact on Margins Direct
So, this is as per the norms of compliance, we have already done that. Rs. 17 crores have been provided, and we still don't change our EBITDA profile. I think this is something which is part of the change which happens in a normal course of business and we are comfortable to maintain our EBITDA profile of 11.5% to 12%. In fact, 12% is what we are talking about.

Analyst inquired about the impact of a one-time ₹17 crore expense on margins; management confirmed it was a compliance provision and would not alter their stated EBITDA margin guidance.

Asked by Shubhankar Gupta from Equitree Capital

Conservatism in Revenue Guidance Partial
So, actually, it is a mix of both. We are not looking at minimizing our growth, but there is a certain amount of, let's say, we have some ROW issues, some forest issues in projects in domestic and some issues on ROW in international. So, we are giving you a conservative guidance and I said 27% plus. So, we are hopeful that we resolve that and we improve from where we are.

Analyst questioned if the revenue guidance was too conservative given strong 9M growth; management acknowledged conservatism due to project-specific issues but expressed optimism for exceeding it.

Asked by Khushbu Gandhi

Related Party Loan Update Direct
So, there is an agreement with the party, and they will be giving part payment by Q4 and balance payment in the next financial year. So, this is on track, and the party has committed to give the money as per the contract.

Analyst sought an update on a related party loan; management confirmed an agreement for repayment, with part payment expected in Q4, providing clarity on a potential liquidity item.

Asked by Nikhil from Kizuna Wealth

Middle East Market Entry and Margin Profile Direct
So, principally, as we mentioned, we have a very clear risk matrix. We do not go to geographies and countries where we feel that the overall potential and the margin profile will get eroded over the years. So, we believe that we are focusing internationally only on T&D, and we are hopeful that we will maintain our margin profile in T&D in the new countries we have entered.

Analyst asked about the margin profile in the new Middle East market; management emphasized a strategy of entering only markets where T&D margin profiles can be maintained, indicating a disciplined approach to international expansion.

Asked by Anshul Jethi from LKP Securities Limited

Transmission Capacity and Outlay in India Direct
So, actually, there have been some delays in execution, thanks to ROW and agitation/forest. And that is changing for sure. There is a lot of effort by the government authorities to improve the execution. We are looking at currently from 5 lakh circuit kilometers, we are expecting it to go to 648,000 circuit kilometers in the next three to four years. The energy transition push of 500 Gigawatts of non-fossil capacity also will help for grid expansion and execution.

Analyst inquired about the overall transmission capacity and outlay in India; management provided a positive long-term outlook, citing government efforts to resolve delays and significant expansion plans driven by energy transition goals.

Asked by Nikunj Bhanushali

2 min read 6 chapters

Detailed narrative

Robust Financial Performance in Q3 & 9M FY26

Transrail Lighting Limited reported strong financial results for Q3 and 9M FY26. Q3 revenue from operations grew 32% year-on-year to ₹1,796 crores, with EBITDA increasing 27% to ₹228 crores, maintaining a 12.7% margin. For the nine-month period, revenue surged by 49% to ₹5,017 crores, and EBITDA grew 40% to ₹614 crores, with margins at 12.2%. Operating PAT for 9M FY26 saw a significant 62% year-on-year growth to ₹324 crores, reflecting stable operating performance and cost discipline.

Healthy Order Book and Strong Pipeline Visibility

The company secured new orders worth ₹1,396 crores in Q3 FY26, bringing cumulative order inflows for the nine-month period to ₹5,135 crores. Including L1 bids of ₹3,483 crores, the effective order book stands at ₹18,216 crores as of December 31, 2025, providing strong revenue visibility. Management expects FY26 order intake to reach ₹9,500-10,000 crores and anticipates a 10-14% order intake from a ₹1 lakh crore tendering opportunity in FY27, with 57% domestic and 43% international composition.

Improved Balance Sheet and Cash Flow Management

Transrail demonstrated strong balance sheet management, with net debt reducing to ₹463 crores as of December 31, 2025, down from ₹703 crores in H1 FY26. This resulted in an improved debt-equity ratio of 0.39x and a net debt-to-EBITDA ratio of 0.57x. Cash equivalents significantly increased by ₹293 crores over H1 to ₹380 crores, supported by improved cash flows and better working capital management, with working capital days improving from 91 days in FY25 to 83 days in 9M FY26.

Strategic CAPEX and Digital Transformation Initiatives

The company's CAPEX initiatives are on track to double capacity for towers and conductors, funded by internal accruals and IPO proceeds. 70% of the brownfield expansion (Phase 1) has commenced production and is expected to be fully operational by February end, with a new tower factory planned for commissioning by March/April 2026. Additionally, Transrail is upgrading its ERP systems from SAP HANA to SAP RISE to enhance cost discipline, compliance, and real-time decision-making, reinforcing its progressive digitization strategy.

Positive Market Outlook and Geographic Diversification

Transrail maintains a healthy geographic mix, with 57% domestic and 43% international contribution to its order book, and 90% of its core business remaining in T&D. The company has successfully entered new geographies, including the GCC region for EPC works, and sees a strong outlook for the transmission and distribution sector, driven by sustained urbanization, renewable energy integration, and grid modernization, with a ₹1 lakh crore addressable market visibility for the next 12 months.

Conservative Revenue Guidance with Upside Potential

While the company upgraded its FY26 revenue growth guidance from 24-25% to 26-27% plus, management noted some conservatism due to ongoing ROW and forest clearance issues in domestic projects and certain international project delays. However, they expressed confidence in resolving these issues and potentially exceeding the revised guidance, aiming for 20-25% growth in the coming years, while maintaining an EBITDA margin profile of 11.5-12%.

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