IGI Logo

Robust & Higher Executable Orderbook to Drive Growth

Est. Vs. Actual for Q1FY26: Revenue – MISS; EBITDA Margin – MISS; PAT – MISS

Change in Estimates post Q1FY26 (Abs)

FY26E/FY27E: Revenue: -3%/-3%; EBITDA: -5%/-3% PAT: 1%/-3%

Recommendation Rationale

• Strong and well-diversified order book ensuring revenue visibility: The company's order book position, including L1 projects, stands at Rs 23,706 Cr, comprising roads, railways, transmission, telecom/optical fibre and tunnel works, providing revenue visibility for the next 24-36 months. For FY26, it anticipates an order inflow of Rs 22,000 Cr, out of which Rs 14,000-15,000 Cr will be from highways, railways, and metros, Rs 4,000-4,500 Cr from power transmission and ropeway, Rs 2,000-2,500 Cr from tunnel and hydro, and Rs 500-1,000 Cr from telecom and other projects.

• Robust tender pipeline supported by balanced segment exposure: The bidding pipeline for FY26 remains strong at Rs 2 Lc Cr ( out of Rs 3.4 Lc Cr) in NHAI projects, Rs 40,000 Cr from hydro, Rs 54,000 Cr from power transmission, and Rs 96,000 Cr from railways and metro projects. In addition to road projects, the company has successfully diversified into other segments such as railways, ropeways, optical fibre, multi-modal logistic parks (MMLPs), and power transmission, to reduce its dependence on road projects.

• Revenue growth to pick up: In Q1FY26, the company’s revenue was lower due to projects being in the initial stage of execution. However, most of the projects have received AD, making the executable order book of Rs 15,000 Cr, which is expected to be completed in the next 2 years. This will support a revenue growth of 13% CAGR over FY25-27E.

Sector Outlook: Positive

Company Outlook & Guidance: The company expects a double-digit revenue growth of 10%-15% in FY26, driven by a large executable order book and new order intake. However, margins are expected to be around 12-13% due to increased competition.

Current Valuation: 11.5x FY27E EPS (vs. earlier valuation of 11.5x FY27E EPS) and HAM, BOT, and transmission assets at 1x book value.

Current TP: Rs 1,540/Share (Earlier TP: Rs 1,580/share)

Recommendation: We maintain our BUY rating on the company

Financial Performance

GR Infraprojects Ltd. (GRIL) reported Q1FY26 revenue of Rs 1,826 Cr, down 4% YoY, due to projects being in the initial stage of execution. EBITDA stood at Rs 230 Cr, down 5% YoY, while PAT amounted to Rs 215 Cr, up 45% YoY. EBITDA margins for Q1FY26 were reported at 12.6%, compared to our estimate of 13.4% and 12.8% in Q1FY25.

Outlook: GRIL anticipates strong order intake, supported by a robust bidding pipeline across multiple sectors, particularly in EPC and HAM projects led by NHAI. Beyond roads, the company is also exploring opportunities in the railways, ropeways, transmission and distribution (T&D), and telecom sectors, which offer substantial growth potential. These diverse prospects position GRIL to leverage its expertise across various infrastructure domains and capitalise on the sector’s anticipated expansion.

Valuation & Recommendation The stock is currently trading at an implied PE of 10x/8x FY26E/FY27E EPS. We maintain our BUY rating on the stock with a target price of Rs 1,540/share, implying an upside of 26% from the CMP.

Key Concall Highlights

• Order Book: As of 30 th June, 2025, the order book stands at Rs 19,410 Cr (excluding L1), with an executable order book of Rs 15,000 Cr and a DBFOT project worth Rs 3,700 Cr awaiting AD. The order book comprises 69% Roads, 4% MMLP, 6% Transmission, 1% Tunnelling, 6% Railways and Metro, and 14% OFC and other sectors.

• Order Inflow: For FY26, the company targets an order inflow of Rs 22,000 Cr, out of which Rs 2,500 Cr was received in Q1FY26.

• Bid pipeline: Till date, bids of Rs 7,300 Cr are yet to be opened. This includes 2 railway, 2 highway projects, and 1 power transmission project.

• HAM Projects: The company has 30 HAM projects, of which 7 are operational, 22 under construction, and 1 awaiting AD.

• Equity Investments in Subsidiaries: As of 30 th June, 2025, the company’s total equity investment in HAM projects is Rs 2,400 Cr. The remaining equity investment required in HAM projects is Rs 2,637 Cr, with the management planning to invest Rs 1,000 Cr in FY26 and in FY27.

• Dividend from InvIT: In Q1FY26, the company received Rs 40 Cr as dividend and interest income from Bharat Highways InvIT. For FY26, it expects to receive Rs 230-240 Cr of income, supporting its profitability moving forward.

• Working Capital Days: The company’s net working capital days stood at 121 days in Q1FY26, compared to 117 days in Q4FY25. This increase is primarily due to a rise in inventory days for power transmission and road projects.

• Capex: In Q1FY26, Rs 33 Cr was incurred on capex. For FY26, capex is projected at Rs 100 Cr. • Balance Sheet: As of 30 th June, 2025, total debt stood at Rs 364 Cr, trade receivables at Rs 1,745 Cr (including HAM debtors of Rs 1,583 Cr), inventories at Rs 660 Cr, retention money Rs 450 Cr and unbilled revenue at Rs 842 Cr.

• Balance Sheet: As of 30 th June, 2025, total debt stood at Rs 364 Cr, trade receivables at Rs 1,745 Cr (including HAM debtors of Rs 1,583 Cr), inventories at Rs 660 Cr, retention money Rs 450 Cr and unbilled revenue at Rs 842 Cr.

Key Risks to Our Estimates and TP

• Lower project awarding and delays in getting AD may impact revenue growth.

• Higher input costs may impact the margin.

For More Axis Securities Disclaimer https://simplehai.axisdirect.in/disclaimer-home SEBI Registration number is INZ000161633