Ceigall Q1 FY26: Steady EPC margins, project start-up timing stays in focus

Ceigall India Limited began FY26 with a steady operating quarter, even as execution conditions were affected by an early monsoon and the termination of a metro contract after quarter-end. For Q1 FY26, standalone revenue from operations excluding bonus and royalty came in at INR 818.3 crore, up 8.7% year on year. Standalone EBITDA, also excluding bonus and royalty, was INR 93.5 crore, translating into an EBITDA margin of 11.42%. Profit after tax stood at INR 55.9 crore.

On a consolidated basis, revenue from operations excluding bonus and royalty was INR 838.2 crore, up 4.3% year on year. Consolidated EBITDA was INR 109.1 crore with a margin of 13.02%, while consolidated profit after tax was INR 51.3 crore. Management characterized the quarter as stable and reiterated its focus on a diversified portfolio, with a gradual reduction in dependence on highways as the company strengthens presence in railways, metros, tunneling, transmission and distribution, renewable energy, and other underground infrastructure.

What the quarter said about execution

A key theme from the call was that the company is managing a portfolio where execution ramps depend heavily on appointed dates and regulatory clearances, especially in Hybrid Annuity Model projects. Management noted that construction activity in the first quarter faced initial headwinds due to early monsoon activity in some states, which temporarily slowed work at a few sites.

Against that backdrop, the company highlighted the start of two large projects in Uttar Pradesh. Management stated that both Northern and Southern Ayodhya projects, with a combined value of INR 2,316 crore, have now started. These starts matter because they convert the order book into measurable execution and revenue over the next several quarters.

The company also provided updates on its Punjab Hybrid Annuity Model portfolio. Out of two HAM projects in Punjab, management indicated that one appointed date is expected before October and the other is also planned before October. The company disclosed equity infusion into HAM projects of INR 419.84 crore up to June 2025, with an additional INR 75.96 crore infused in July 2025, taking total equity infusion to INR 512.92 crore. Post-IPO, equity of INR 259.25 crore has been infused.

Financial summary (Q1 FY26)

Order book mix and where growth is expected to come from

As of June 30, 2025, the order book stood at INR 10,337.4 crore. The mix by contracting model was 36.87% Engineering, Procurement and Construction, 61.75% Hybrid Annuity Model, and 1.38% Build-Operate-Transfer.

By sector, the order book remains strongly oriented toward structures and elevated work. Management disclosed that 83.42% of the order book is from elevated highways, structures and flyovers, 13.15% from railway and metro projects, 2.05% from tunnels, and 1.3% from emerging segments such as airport runway and bus terminals.

The company is currently executing 22 ongoing projects, including 13 EPC projects, 8 HAM projects and 1 BOT project. Management also stated that National Highways Authority of India projects contribute 80.47% of the total order book. While this concentration still points to continued reliance on the national highway authority ecosystem, management positioned the current order mix as diversified across eight states, reducing the risk of a single geography driving operational volatility.

Diversification: transmission and distribution enters the story

One of the most notable strategic updates from the call was the company’s formal entry into transmission and distribution and renewable energy. As a first win in this new vertical, management stated that the company has emerged as L1 in the Velgaon 400 kilovolt substation tender worth INR 490 crore and is awaiting the letter of intent.

Management’s commentary linked this move to the broader policy and investment tailwinds expected in transmission and distribution. It also suggested the company is positioning to participate in tariff-based competitive bidding opportunities and has already bid for other transmission line work as well as for a renewable energy tender under the KUSUM scheme in Madhya Pradesh.

While the quarter’s financials do not yet reflect this diversification, the disclosure is important because it signals where incremental order inflows could come from beyond roads and structures. The company reiterated a target order inflow of INR 5,000 crore for the year.

The Bhubaneswar Metro termination and what it means

A key post-quarter development was the termination of the Bhubaneswar Metro project by Delhi Metro in July 2025. Management stated that the project was terminated because the authority was unable to start it, and the Government of Odisha intends to change the design into an underground with double decker concept, with a fresh contract to be issued.

From the company’s perspective, the key near-term focus shifts to recovery of costs and settlement. Management stated that it had mobilized, undertaken initial diversion and piling work, and spent close to INR 30 crore. It also stated that it received one tranche of mobilization advance of INR 22.5 crore, while the second tranche was not received. The company indicated that bank guarantees are to be returned and that claims are being prepared and submitted.

The termination reduces order book visibility in the metro segment until the retendering process becomes clearer. Management said it would be interested in bidding again but acknowledged that there is no formal preference in tendering.

Approvals and appointed dates: the swing factor for FY26 execution

The other execution swing factor is the start of the Varanasi-Ranchi-Kolkata Expressway packages VRK 11 and 12. Management stated it expects Stage 1 clearance as early as possible and is targeting appointed dates in Q3 FY26 for both packages. Management also said financial closure is completed and mobilization has started.

Questions on the risk of cancellation were addressed by management, which stated it has not heard anything negative and that it would be difficult for the authority to terminate across multiple packages given land acquisition already undertaken and the broader portfolio of packages already awarded.

Balance sheet, working capital, and funding the HAM equity requirement

On a standalone basis, gross debt was reported at INR 684.8 crore, comprising equipment loans, term loans and working capital loans. On a consolidated basis, gross debt was INR 1,424.7 crore, including HAM term loans. Management stated consolidated net debt to equity was 0.5 as of Q1 FY26.

Working capital remained a key operational metric. Management reported net working capital days of 75 as of June 30, 2025, factoring inventory, work in progress, receivables and vendor payments. It disclosed inventory of 13 days, debtors of 65 days, creditors of 102 days, and work in progress of 99 days. In value terms, management disclosed standalone debtors of INR 841 crore, consolidated debtors of INR 529 crore, inventory of INR 96 crore, unbilled contract value of INR 1,014 crore, and vendors of INR 818 crore.

For HAM projects, management disclosed pending equity infusion of INR 872 crore over the next two and a half years. It stated that equity will be infused in line with progress and sanction terms, with around 30% required at the time of appointed date and the balance deployed with progress.

The company also outlined expected sources to support these equity needs, including internal cash accruals and refinancing top-ups. Management stated that Malout HAM, which is completed, is being refinanced and could yield a top-up of around INR 120 to 140 crore. It also stated that once two additional HAM projects achieve commercial operation date, refinancing could provide a top-up of about INR 200 crore.

What to watch from here

Management reiterated FY26 revenue growth guidance of 10% to 15% and pure EPC EBITDA margin guidance of 11% to 11.5% excluding bonus and royalty. The quarter’s 11.42% standalone EBITDA margin sits within that range and management stated that no bonus or royalty income was booked in Q1 FY26.

From an investor’s perspective, the near-term story is less about a single-quarter result and more about timing and conversion. The starts of the Ayodhya projects and expected appointed dates in Punjab provide visibility. But the pace at which VRK 11 and 12 clear Stage 1 approvals and receive appointed dates remains a key determinant of how much execution can occur in FY26.

At the same time, the company’s entry into transmission and distribution, with an L1 position in a INR 490 crore substation tender, adds a new narrative thread that could broaden the order book over time. How quickly this vertical translates from a first win into repeatable order inflows will shape the medium-term diversification story.