SRM Contractors Limited Q4 FY26 Earnings Conference Call Transcript

Financial Performance Highlights

Q4 FY26 Performance:

  • Revenue: ₹446 crore, up 96% year-on-year
  • EBITDA: ₹80 crore, up 96% year-on-year
  • PAT: ₹54 crore, up 120% year-on-year
  • EPS: ₹23.6 per share

Full Year FY26 Performance:

  • Revenue: ₹1,026 crore, up 94% year-on-year
  • EBITDA: ₹95 crore, up 86% year-on-year
  • EBITDA Margin: 8.1%
  • PAT: ₹111 crore, up 102% year-on-year
  • PAT Margin: 10.8%

Operational Highlights and Order Book

Order Book Position:

  • Order book as of March 31, 2026: ₹1,884 crore (standalone)
  • Current order book (as of call date): ₹3,000 crore (consolidated)
  • SRM standalone: ₹2,112 crore
  • MIPL (subsidiary): ₹850+ crore

Order Inflow FY26:

  • Fresh orders secured: ₹1,097 crore

Recent Order Wins:

  • Nashik Ring Road project: ₹483 crore (14km road construction, 12-month completion)
  • NHAI landslide remedial measures at Thalout: ₹128 crore (12-month completion)

Bid Pipeline:

  • Strong pipeline of ₹6,000 crore
  • Targeted order inflow for FY27: ₹2,000 crore

Capacity Expansion and Capital Expenditure

Capex Investment:

  • FY26 capex: ₹152 crore
  • FY27 planned capex: ₹250 crore
  • Equipment financing debt: ₹130 crore taken in FY26 for new equipment

Subsidiary Performance (MIPL)

Maccaferri Infrastructure Private Limited:

  • 51% stake acquired by SRM
  • FY26 revenue: ₹267 crore total
  • Post-acquisition revenue (after Oct 22): ₹172 crore
  • PAT margins: Pre-acquisition 6.7%, Post-acquisition 10.8%, Full year 9.4%
  • Remaining payment for acquisition: ₹19 crore due in June 2026

Financial Guidance for FY27

Management Outlook:

  • Revenue growth: 45-55% year-on-year
  • Expected turnover: ₹1,500-1,750 crore (consolidated)
  • SRM standalone: ₹1,150-1,300 crore
  • MIPL: ₹400-450 crore
  • EBITDA margin: 16-18%
  • PAT margin: 11% (8.75-10.25% range)
  • Expected order book by FY27 end: ₹4,000 crore

Balance Sheet and Financial Position

Debt Position:

  • Long-term debt increased due to equipment financing
  • Debt-to-equity ratio expected to remain at 0.2-0.3%
  • Equipment debt is project-specific and cleared upon project completion

Other Financial Items:

  • Other financial assets: ₹157 crore
  • Security deposits: ₹82 crore
  • Contract assets (unbilled revenue): ₹76 crore
  • Unbilled revenue: ₹130 crore
  • Inventory: ₹47 crore
  • Trade payables: ₹166 crore (₹148 crore current portion)
  • Non-controlling interest: ₹42 crore (due to MIPL acquisition)

International Expansion

Abu Dhabi Branch:

  • Established as gateway to GCC and African markets
  • Currently in discussions with clients in Oman and UAE
  • No international orders yet; projections exclude international business

Project Execution Details

Project Types and Timelines:

  • Road projects: Typically 2-year completion (except Nashik Ring Road: 12 months)
  • Slope stabilization: 1-1.5 year completion
  • Slope projects typically under ₹300 crore in size

Notable Projects Completed:

  • India's longest precast cut-and-cover tunnel at 12,500 feet in Galwan, Ladakh
  • India's first high-altitude ammunition cavern at 16,200 feet in Hanle
  • India's tallest reinforced soil wall at Reasi, Jammu and Kashmir

Awards and Recognition

Company Awards:

  • ET Infra Leadership Award for Excellence in Border Remote Hilly Region Infrastructure
  • 17th CIDC Vishwakarma Award 2026
  • Lieutenant General A.K. Puri Memorial Trophy
  • Rashtriya Ratna Samman 2026 - EPC Contractor of the Year

Individual Recognition:

  • Managing Director Puneet Pal Singh: ET Young Industry Leader 2025

Q&A Session Highlights

Margin Clarifications:

  • Q4 gross margin decline attributed to inventory purchases and unbilled revenue position
  • Full-year gross margins maintained at consistent levels
  • Expense reclassification due to auditor change affected quarterly comparisons

Competitive Landscape:

  • Slope stabilization: 33-50% strike rate, competitors include Spar Geo, Bharat, Pioneer, KEC
  • Road projects: 5-7% strike rate, highly competitive

Raw Material Price Protection:

  • MoRTH circulars provide 80-85% protection for bitumen and diesel price fluctuations
  • Minimal expected impact on margins

Funding Strategy:

  • No immediate plans for QIP or equity dilution
  • Open to all options depending on market conditions
  • Current capex funded through equipment financing

Defense Projects:

  • Expecting more tunnel projects in Ladakh region
  • Current tunnel participation at 2-3% of business