Highway Infrastructure Limited: Paving the Way for Growth in Q2 & H1 FY26

Highway Infrastructure Limited (HIL) has announced its financial results for Q2 and H1 FY26, marking a significant milestone as the company hosted its first earnings call since listing. The management highlighted a period of robust growth and strategic expansion, underscoring its position as a key player in India's burgeoning infrastructure sector. The company reported a total revenue of Rs. 115.3 crore for Q2 FY26, with H1 FY26 revenue standing at Rs. 227.8 crore, a marginal increase from Rs. 226.8 crore in H1 FY25. Profit after Tax (PAT) witnessed an impressive surge, reaching Rs. 9.7 crore in Q2 FY26, a 515% year-on-year growth, and Rs. 16.9 crore for H1 FY26, up 192% year-on-year. EBITDA also saw substantial growth, increasing by 253% year-on-year to Rs. 13.7 crore in Q2 FY26 and 102% year-on-year to Rs. 25.8 crore in H1 FY26.

HIL's diversified business model, spanning EPC Infrastructure, Tollway Collection, and Real Estate, has been instrumental in its consistent performance. The EPC segment, the backbone of the company, executes projects across highways, bridges, IT parks, and housing. The Tollway Collection vertical manages toll charges on high-traffic corridors under NHAI contracts, while the Real Estate segment focuses on residential and commercial properties. For H1 FY26, Tollway Collection contributed 78% of the revenue, EPC Infra 20%, and Real Estate & Others 2%. This balanced portfolio allows HIL to mitigate risks and capitalize on varied market opportunities.

Strategic Pillars for Future Growth

HIL's growth strategy is anchored on four key pillars: growing existing business verticals, strengthening its order book, selectively expanding its geographical footprint, and maintaining a disciplined balance sheet. The company aims to maximize toll collections from traffic-driven corridors and bid selectively for larger EPC projects, including renewable energy initiatives. A significant development is the launch of Way-Side Amenities and Trucker Facilities, which will include fuel stations, EV charging points, and food courts, adding a new dimension to its EPC contracts.

The order book has been a strong indicator of future revenue visibility, scaling from Rs. 225 crore in March 2023 to Rs. 775 crore by September 2025. This includes Rs. 584 crore from EPC and Rs. 191 crore from Tollway projects. Management anticipates an additional Rs. 250 crore in order inflows over the next 2-3 months, with a target to reach a Rs. 1,000 crore order book by the end of the current year. The company's focus on government projects ensures execution certainty and payment security.

Geographical expansion is another critical aspect of HIL's strategy. While maintaining a strong presence in Madhya Pradesh and Uttar Pradesh, the company is actively deepening its footprint in high-growth states like Assam, Gujarat, and Rajasthan. New markets such as Jammu & Kashmir, Bihar, Telangana, Kerala, Tamil Nadu, and Daman & Diu are also being targeted to diversify the project base and reduce concentration risk. This strategic approach allows HIL to tap into diverse regional opportunities and mitigate localized market fluctuations.

Financial Prudence and Outlook

Financial prudence remains central to HIL's operations. The company has successfully improved its debt-to-equity ratio to 0.61x and maintained a healthy cash position, crucial for supporting future bidding and expansion. For FY25, the company reported a robust Return on Equity (ROE) of 19.1% and Return on Capital Employed (ROCE) of 16.7%, reflecting efficient capital allocation and strong profitability. Management is guiding for an EBITDA margin of 8%-12% in FY27-28 and expects to generate approximately Rs. 15-20 crore yearly from commercial real estate rental income.

The launch of the Neww York City Phase-IV project in Indore, adding 0.17 million square feet of saleable area, further reinforces HIL's real estate strategy in key micro-markets. The project, focusing on mid-value apartments, has received positive market feedback, with over 600 families already residing in the township. This demonstrates the company's ability to identify and execute profitable real estate ventures.

In conclusion, Highway Infrastructure Limited's Q2 and H1 FY26 results underscore a period of strategic clarity and disciplined execution. With a strong order book, diversified revenue streams, prudent financial management, and a clear roadmap for geographical and vertical expansion, HIL is well-positioned to capitalize on the significant opportunities within India's growing infrastructure landscape. The company's focus on government projects and emerging segments like renewables and wayside amenities bodes well for sustained growth and enhanced shareholder value.