Vishnu Prakash R Punglia Limited — Q2 FY26 earnings call

Call held 17 Nov 2025

Management summary

Vishnu Prakash R Punglia Limited reported a challenging Q2 FY26 with significant declines in revenue and profitability, primarily due to higher working capital utilization, delayed government payments, and initial mobilization expenses. However, the company highlighted a strong order book of ₹5,001 crores and substantial promoter support through interest-free loans, which helped reduce external debt. Management expects improved fund flow and execution in H2 FY26, guiding for 10-20% revenue growth and normalized EBITDA margins of 13-13.5%.

Highlights

  • Order book of ₹5,001 crores provides strong revenue visibility for the next two to three years.

  • Significant promoter support with interest-free unsecured loans increasing to ₹229 crores, reducing dependence on borrowings.

  • External banking and non-banking financial company exposure reduced by ₹160 crores to ₹488 crores.

  • Receivable collections improved in October, with ₹100-125 crores recovered, including 50% from Rajasthan government.

  • Healthy bidding pipeline of over ₹3,000 crores, with a consistent 15-20% strike rate.

Concerns

  • Q2 FY26 operating revenue declined by 12% YoY to ₹296 crores.

  • Q2 FY26 EBITDA declined by 50% YoY to ₹24 crores, with EBITDA margin at 8.25%.

  • Net profit for Q2 FY26 was ₹4 crores, with PAT margin at 1.25%.

  • Working capital increased due to delayed payments, impacting turnover and margins.

  • An ECL provision of ₹8.5 crores was recognized based on aging of receivables.

Key financials

2 periods

Q2 FY26

  • Operating Revenue
    ₹296 Cr
    YoY -12%
  • EBITDA
    ₹24 Cr
    YoY -50%
  • EBITDA Margin
    8.3%
  • Net Profit
    ₹4 Cr
  • PAT Margin
    1.3%

H1 FY26

  • Revenue
    ₹572 Cr
    YoY -3%
  • EBITDA
    ₹56 Cr
    YoY -32%
  • EBITDA Margin
    9.8%
  • Profit After Tax
    ₹11 Cr
  • PAT Margin
    1.9%

What they filed

Q1 FY27: revenue down 50.0%, net profit down 657.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue335 241 405 276 296 −12%177 −27%102 −75%138 −50%
EBITDA49 28 46 32 24 −51%-13 −146%-125 −372%-34 −206%
Net profit24 4 16 7 4 −83%-30 −850%-131 −919%-39 −657%
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

₹5,001 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹77 Cr

Execution

success for the next two to three years.

Composition

  • Railways (segment) 33%
  • Water supply, civil infrastructure, railway related projects, specialized works for public sector undertakings (segment)

Pipeline

L1 awaiting loa

bidding pipeline remains healthy at over Rs 3,000 crores

The company has a strong order book providing good visibility for the next 2-3 years, with a growing contribution from the railway sector and a healthy bidding pipeline.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Gross ₹488 Cr
    • Repayment Total banking and non-banking financial company exposure reduced from Rs. 648 crores in March'25 to Rs. 488 crores in September'25. ₹160 Cr
    Total banking and non-banking financial company exposure reduced to Rs. 488 crores as of September'25 compared to Rs. 648 crores in March'25.
  • Liquidity Liquidity disclosed Working capital increased due to delayed payments. Promoter support through interest-free unsecured loans increased from ₹60 crores to ₹229 crores, reducing dependence on borrowings. Receivable collections improved significantly in October, with ₹100-125 crores recovered, including 50% from Rajasthan government.
    Payments are getting delayed. This has increased the company's working capital and it has also impacted the company's turnover and margins. ... Promoter support has been significant, with interest-free unsecured loans increasing from Rs. 60 crores in March 25 to around Rs. 229 crores in September'25. ... Receivable collections have also improved, added by significant payment release from Rajasthan government in October. ... we have received around Rs. 100 crore to RS. 125 crore, out of which around 50% has been received from Rajasthan government.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · Medium confidence 10-20%
    So, we are hoping that our revenue should increase by 10%, 20%.

    — Sarfaraz Ahmed

Margin

  • EBITDA Margin Margin · H2 FY26 · High confidence 13-13.5%
    Okay. But do you see, our normalized level let us say 13%, 13.5% will be achieved in H2? Sure, sir. Absolutely.

    — Sarfaraz Ahmed

Debt

  • Interest Costs Debt · coming quarter · High confidence declined
    we expect interest costs to be declined and margins to gradually improve as execution picks up in the second half of the year.

    — Sarfaraz Ahmed

Order Book

  • Bidding Strike Rate Order Book · ongoing · High confidence 15-20%
    Okay. But do you think that our 15% to 20% strike rate is continuing. Yes.

    — Jayant Punglia

What to watch in Q3 FY26

EBITDA Margin normalization

H2 FY26
Current 8.25% (Q2 FY26)
Target 13-13.5%

Why it matters

Improvement in EBITDA margin is crucial for profitability recovery, as guided by management.

Okay. But do you see, our normalized level let us say 13%, 13.5% will be achieved in H2? Sure, sir. Absolutely.

Risks & concerns

  • Delayed payments from government projects

    high

    Payments are getting delayed, especially from Jal Jeevan projects, leading to increased working capital and impacting turnover and margins.

    Management acknowledged

  • Working capital intensity and cash flow pressure

    high

    Higher working capital utilization and slower repayment releases from projects have moderated EBITDA and PAT margins.

    Management acknowledged

  • ECL provision on receivables

    medium

    An ECL provision of ₹8.5 crores was recognized based on aging of receivables, though management considers it a notional conservative provision.

    Management acknowledged

  • Impact of stock price decline on retail investors

    medium

    An investor expressed concern over the significant drop in stock price from ₹180 to ₹90, questioning the promoter's capital infusion method.

    Analyst acknowledged

Q&A highlights

5 direct
Order book execution timeline and potential penalties Partial
No, sir, it is worth 5,000 crores. So, there will be a lot of execution in this year. There will be execution of orders pending for more than 1,500 crores. After that, in the next year, there will be an execution of approximately 50% combining both the years.

Analyst questioned the long execution timeline of the order book (4 years for ₹5000 crores at ₹300 crores/quarter) and potential penalties, prompting management to clarify execution pace.

Asked by Rajesh Bhandari

Payment delays from Jal Jeevan Mission and government Direct
Yes, Sir. The problem is in Jal Jeevan. ... Some improvements have been there and till September, many payments have been released, even from the Rajasthan government. We hope that in two, three quarters, there will be a normal situation.

Analyst probed the root cause of payment delays, identifying Jal Jeevan as a major issue affecting many companies, and sought a timeline for improvement.

Asked by Rajesh Bhandari

Dispute regarding past joint venture with Kalpataru Direct
Yes, Sir. This was a small project of Rs. 28 crores, four years ago. Kalpataru was executing it. Kalpataru was a different company. It is an individual proprietorship firm. So, they slowed down the work because of which we gave them notice. Bank has frozen that to remove that they have made an appeal in the court. Now the work is done now.

Analyst inquired about an old dispute with a JV partner, Kalpataru, mentioned in the audit, seeking clarification on its resolution status.

Asked by Rajesh Bhandari

Receivables breakdown and impact on working capital Direct
Major it is in water supply. In Rs. 790 crores, let me tell you the bifurcation. Around Rs. 260 crores is our retention part. Out of the remaining Rs. 500 crores, water supply is around 70% for water supply project.

Analyst sought a detailed breakdown of the ₹790 crores in receivables, specifically the split between water and railways, and the portion attributable to retention.

Asked by Lokesh Kashikar

Strategy for achieving FY26 revenue target amidst cash flow issues Partial
My work in progress is around Rs. 750 crores. So, that work is already executed. But certifications and approvals are pending. Plus the amount of funds I am getting from water supply related activities, we are deploying the same fund back because earlier, I used to get a payment of Rs. 5, I used to cover Rs. 10. So, now, we are paying back the amount we are getting.

Analyst challenged management on how they plan to achieve the FY26 revenue target (₹1500-1600 crores) given current cash flow problems and increasing borrowings, questioning the execution strategy.

Asked by Lokesh Kashikar

Promoter infusion vs. stock pledging and impact on stock price Partial
Yes, sir. Thank you for your appreciation. There are multiple options we are looking for but as of now you know that this is in need of time and this investment supports a lot to the company. That is why we have taken this type of decision and this is a big support from the promoter.

An investor questioned why promoters chose to infuse funds directly rather than pledging shares, highlighting the negative impact on the stock price due to perceived selling.

Asked by Shashikant Srinivasan

Utilization of promoter funds and increase in trade receivables Direct
Sir, your first question, what we have infused, the infusion that has been done by promoters, Rs. 60 crores we have done debt payment and rest we have infused in working capital and your second question is that our debtors level has increased, if you will see that our traction in work-in-progress is around Rs. 50 crores to Rs. 60 crores, it has reduced from before.

Analyst asked for clarification on how promoter funds were utilized (debt repayment vs. working capital) and why trade receivables increased despite the infusion.

Asked by Akhil Jain

Consideration of private projects due to government payment issues Direct
Sir, from the beginning, we did not have the intent that we will not do it. I mean, if there is a good opportunity, then obviously we will do it. For example, we are doing work in PSUs as well. For example, we are doing a project for BHEL of Rs. 250 crores. Apart from that, the projects that come in private, if they look suitable, then we will do it.

Analyst questioned if the company would consider bidding for private projects, given the ongoing payment issues with government contracts, to improve cash flow.

Asked by Devesh Rathi

2 min read 5 chapters

Detailed narrative

Q2 & H1 FY26 Financial Performance Overview

Vishnu Prakash R Punglia Limited reported a challenging Q2 FY26, with operating revenue declining by 12% year-on-year to ₹296 crores. EBITDA for the quarter stood at ₹24 crores, a 50% YoY decrease, resulting in an EBITDA margin of 8.25%. Net profit was ₹4 crores, with a PAT margin of 1.25%. For the first half of FY26, revenue was ₹572 crores (down 3% YoY), EBITDA was ₹56 crores (down 32% YoY) with a margin of 9.84%, and PAT was ₹11 crores (PAT margin 1.87%). The moderation in margins was attributed to higher working capital utilization, slower repayment releases, and initial mobilization expenses.

Order Book and Bidding Pipeline

As of September 30, 2025, the company's order book stands at ₹5,001 crores, providing revenue visibility for the next two to three years. The railway sector's contribution to the order book has significantly increased from 15-17% in the past three years to 33% by September 2025. The bidding pipeline remains healthy at over ₹3,000 crores, with tenders submitted in roads, bridges, urban infrastructure, and renewable link construction. The company maintains a consistent bidding strike rate of 15-20%.

Working Capital Management and Receivables

The company faced difficulties with delayed payments, particularly from government projects like Jal Jeevan, which increased working capital requirements and impacted profitability. An Expected Credit Loss (ECL) provision of ₹8.5 crores was recognized for aging receivables. However, management noted improved receivable collections in October, with ₹100-125 crores recovered, approximately 50% of which came from the Rajasthan government. The company expects fund flow to normalize in Q3 and Q4.

Promoter Support and Debt Reduction

Promoter support has been substantial, with interest-free unsecured loans increasing from ₹60 crores in March 2025 to ₹229 crores by September 2025. This infusion helped reduce the company's dependence on external borrowings. Total banking and non-banking financial company exposure decreased from ₹648 crores in March 2025 to ₹488 crores in September 2025. This reduction in external debt, coupled with promoter support, is expected to lower interest costs and improve margins in the coming quarters.

Operational Strategy and Outlook

The company is focusing on increasing execution velocity in H2 FY26, particularly in railway projects where cash flow is more immediate. Management expects margins to gradually improve and interest costs to decline as execution picks up. They are guiding for a 10-20% revenue growth for FY26 and anticipate EBITDA margins to normalize to 13-13.5% in H2. The company is also open to suitable private projects if they align with their strategy, in addition to their focus on central and state government projects and PSUs.

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