Enviro Infra Engineers in FY26: Bigger order book, renewables entry, and a working capital reality check

Enviro Infra Engineers Limited closed FY26 with steady annual growth in revenues and profits, but with visible end-quarter pressure on margins and cash conversion. For FY26, revenue from operations was INR 11,456 million, up 7.46% year on year. EBITDA was INR 2,768 million, up 3.38%, while PAT rose 6.34% to INR 1,884 million. The year’s margins stayed healthy at 24.16% EBITDA and 15.86% PAT.

Q4 FY26 was more volatile. Revenue from operations was INR 4,273 million, up 8.75% year on year, but EBITDA fell to INR 799 million versus INR 994 million in Q4 FY25. EBITDA margin dropped to 18.70% from 25.31%. PAT declined to INR 543 million from INR 741 million, and PAT margin dropped to 12.37% from 18.35%.

Management attributed the softer quarterly profitability to a mix of factors: higher execution and operational costs, cost build-up while certain projects remained in design and approval stages, and mix impact from renewables execution where some work was tied to IPP assets with limited execution margin.

How the revenue mix shifted in FY26

The FY26 revenue mix shows Enviro Infra becoming more wastewater-heavy, while renewables started contributing meaningfully for the first time.

On a consolidated basis, FY26 revenue from operations of INR 11,456 million was split as follows.

This is a meaningful shift versus earlier years, where WSSP was the larger component. The data also highlights that O&M remains a small share of revenue, though management emphasized that O&M carries higher margins than execution.

Order book: scale-up and diversification

A central FY26 highlight is the sharp expansion in the stated consolidated outstanding order book to INR 68,136 million as on date. The company described this as 242% year-on-year growth.

The order book is split into a water segment and a renewable segment.

Water segment outstanding orders were shown at INR 36,836 million across WWTP EPC, WWTP HAM, WSSP and O&M. The renewable segment reported outstanding orders of INR 20,510 million across solar EPC, solar IPP, BESS EPC, BESS IPP and wind EPC, plus an additional O&M and IPP value of INR 10,790 million.

In the concall, management also spoke about order book visibility over the next 24 months, and discussed additions such as a project from Bihar Urban Infrastructure Development Corporation and sanitation projects in Pune and Nashik. It also highlighted four BESS projects from NTPC with a combined 930 MWh capacity.

Renewables entry: what is visible, and what is still unknown

FY26 was described as the first year of operations for the renewable segment, with integration across solar, wind and BESS. The acquisition of Suyog Urja Limited was positioned as a step to add wind EPC execution capability. The presentation stated that Suyog is an established wind EPC player with execution experience across 1,200 MW and an active pipeline of approximately 1,702 MW.

Management provided some margin color in the concall. It stated that BESS EPC projects are expected to deliver PAT margins of around 10%, and that renewables as a blended segment could be in the 10% to 12% PAT range, varying by project.

However, investors should note that granular segment profitability was not provided in the presentation tables, and management indicated that segmental revenues and profitability would be shared separately going forward.

Working capital and cash flow: the key pressure point

The sharpest investor concern in the concall was the working capital stretch. Management said net working capital cycle increased to 166 days in FY26, driven mainly by delayed release of funds in AMRUT projects across states.

Management provided a detailed breakdown:

• Inventory days: 11
• Receivable days: 53
• Unbilled revenue (UBR) days: 195
• Creditor days: 92
• Net working capital cycle: 166

This matters because a large part of the strain is sitting in UBR, implying execution has progressed but invoicing is delayed due to funding and billing approvals.

Cash flow reporting also reflects this pressure. The presentation showed net cash flow from operating activities at minus INR 630 million for FY26. The company presented an adjusted operating cash flow metric that adds back concessionaire receivable. On that basis, adjusted operating cash flow was INR 37 million in FY26, down from INR 278 million in FY25.

Management said it expects working capital to normalize toward around 90 days as fund releases resume and UBR converts into billings.

FY27 guidance: conservative framing after a miss

Management acknowledged that a prior topline growth guidance was not met in FY26 due to elongated bid evaluation timelines, a re-bidding incident, and slower design approvals in specific projects.

For FY27, management guided:

• Topline around INR 2,000 crore
• PAT around INR 270 to INR 280 crore
• EBITDA margin guidance reduced to 21% to 22%, citing commodity price increases linked to a global crisis

It also shared that FY27 order inflows are expected to be at least INR 2,500 crore, with a submitted bid pipeline of about INR 1,200 crore and additional projects of interest of about INR 5,000 crore.

Takeaways

Enviro Infra Engineers ended FY26 with steady annual profitability and a sharply larger order book, while Q4 showed margin volatility. The renewables push is now substantial in order book terms, supported by BESS wins and a wind EPC acquisition. The primary near-term risk, based on management’s own commentary, is working capital and cash conversion, especially given the rise in unbilled revenue due to delays in government fund releases.

FY27 execution against the INR 2,000 crore revenue guidance, along with visible improvement in working capital, is likely to be the key validation point for investors watching this transition from a water EPC player to a broader environmental and energy infrastructure platform.