Vishnu Prakash R Punglia Limited: Navigating Headwinds with Strategic Resolve in H1 FY26

Vishnu Prakash R Punglia Limited (VPRPL), a seasoned player in India's infrastructure engineering, procurement, and construction (EPC) sector, recently released its Q2 and H1 FY26 earnings, painting a picture of a company diligently navigating industry-wide challenges while maintaining a clear strategic vision. Despite a period marked by payment delays and increased working capital demands, VPRPL demonstrated resilience through robust operational control and significant internal support.

For the second quarter of fiscal year 2026, VPRPL reported a consolidated revenue from operations of INR 295.7 crore, reflecting an 11.7% year-on-year decline. The first half of the fiscal year saw revenue at INR 572.1 crore, a modest 3.3% decrease compared to the previous year. Profitability metrics also experienced moderation, with Q2 EBITDA standing at INR 24.4 crore (down 49.8% YoY) and a margin of 8.25%. The net profit for the quarter was INR 3.7 crore, yielding a PAT margin of 1.25%. For H1 FY26, EBITDA was INR 56.3 crore (down 31.5% YoY) with a margin of 9.84%, and PAT reached INR 10.7 crore, at a margin of 1.87%. Management attributed this margin compression primarily to higher working capital utilization, slower repayment releases from water supply projects, and initial mobilization expenses for newly commenced projects. An Expected Credit Loss (ECL) provision of INR 8.5 crore was also recognized due to aging receivables, though management clarified this as a conservative, notional provision.

Operational Resilience and Strategic Focus

Despite the financial headwinds, VPRPL showcased strong operational resilience, maintaining an impressive on-time project delivery rate of over 90%. This was supported by efficient deployment of manpower, machinery, and materials across multiple states. The company's order book remains robust, standing at over INR 5,001 crore as of September 30, 2025, providing clear revenue visibility for the next 24-36 months. This diversified portfolio spans water supply projects, railway projects, road projects, and irrigation network projects, ensuring execution stability.

A significant highlight from the period was the substantial promoter support. Promoters increased their investment from INR 59 crore in March 2025 to INR 229 crore by September 2025 through interest-free unsecured loans. This infusion dramatically improved the company's operational liquidity and reduced its dependence on external borrowings, with total banking and non-banking financial company exposure decreasing from INR 648 crore to INR 488 crore. This disciplined financial management is expected to materially reduce interest costs in the coming quarters.

Capitalizing on Growth Opportunities

VPRPL is strategically positioning itself to capitalize on emerging opportunities, particularly in the Indian Railway sector. The government's allocation of INR 2.52 lakh crores in FY26 for railway expansion, redevelopment, and security support presents a significant growth avenue. The company's order book contribution from railways has already increased to 33% by September 2025, up from 15-17% previously. Furthermore, VPRPL's in-house steel structure and girder plants are operating at full capacity, contributing to cost reduction and maintaining competitiveness.

On the business development front, VPRPL has a healthy bidding pipeline of over INR 3,000 crore, with tenders submitted or under evaluation in roads, bridges, urban infrastructure, and renewable-linked construction projects. This strategic diversification aims to deepen client engagement, enter new geographies, and pursue higher-margin segments, with order inflows expected in the near term.

Outlook and Investor Confidence

Management expressed confidence in a turnaround, anticipating that interest costs will decline and margins will gradually improve as execution picks up in the second half of FY26. They expect fund flow to normalize, leading to strengthened execution momentum in Q3 and Q4. The company is targeting a revenue growth of 10-20% for FY26 and expects to achieve normalized EBITDA margins of 13-13.5% in H2 FY26. This optimism is bolstered by improved receivable collections and strong support from both central and state governments in arranging funds for projects.

Vishnu Prakash R Punglia Limited's H1 FY26 performance underscores its ability to navigate a challenging operating environment through strategic financial discipline, robust operational execution, and a clear focus on future growth opportunities. The company's proactive measures, particularly the significant promoter capital infusion and strategic diversification, position it for a stronger second half and sustained long-term growth, reinforcing investor trust in its resilient business model.