KPIL Q1 FY27: Strong execution, better margins, and a record order book

Kalpataru Projects International Limited (KPIL) began FY27 with a quarter that combined steady execution with a visible step up in profitability. For Q1 FY27 (quarter ended 30 June 2026), the company reported consolidated revenue of INR 6,408 crores, up 4% year on year. Since revenue from Road SPVs and the Brazil subsidiary was minimal this quarter, KPIL also highlighted a comparable view where revenue excluding those items rose 9% to INR 6,396 crores.

The margin story was sharper than the revenue headline. Consolidated core EBITDA increased 7% to INR 562 crores, with EBITDA margin improving to 8.8% (up 30 basis points). At the profit before tax level, KPIL reported a 45% jump in PBT to INR 420 crores, and PBT margin expanded to 6.6% (up 190 basis points). PAT rose 46% to INR 312 crores.

The quarter’s operating drivers: T&D, B&F and Oil and Gas

KPIL’s business mix continued to tilt toward segments where execution intensity and scale can support margins. In Q1 FY27, segment revenue (consolidated) showed the following trend.

Transmission and Distribution, excluding the Brazil subsidiary, grew 10% year on year to INR 2,924 crores. Buildings and Factories rose 15% to INR 1,588 crores, and Oil and Gas increased 18% to INR 693 crores. Urban Infra also grew 15% to INR 295 crores.

Two segments were soft. Water declined 7% to INR 626 crores and Railways declined 23% to INR 195 crores. Management attributed the slower water pace to collections in Jal Jeevan Mission projects, which has been a recurring operational constraint for the industry.

Financial summary (consolidated)

The reduction in finance cost, combined with operating leverage and business mix, played a major role in the step up at PBT and PAT levels.

Order book momentum and what it implies for FY27

KPIL closed the quarter with its highest ever order book at INR 66,607 crores as of 30 June 2026. Order inflows year to date in FY27 were INR 7,668 crores, and management indicated it was additionally in L1 or favorably placed in projects worth about INR 7,300 crores.

The order book mix remained led by Transmission and Distribution (44%) and Buildings and Factories (29%), with Water at 11%. Geography wise, the order book was diversified with India at 61% and the balance spread across Africa (11%), Americas (10%), Middle East (10%), Europe (6%) and the rest of Asia (2%).

Management also reiterated the view that the domestic transmission market has a multi year runway. On the call, the company said it expects an annual addressable market of about INR 1 trillion to INR 1.25 trillion for at least the next five years in India, and also referenced incremental HVDC opportunities.

For FY27, KPIL reaffirmed its order inflow target of INR 30,000 crores. It also reaffirmed revenue growth guidance of at least 15% on an annualized basis and a PBT margin improvement of over 75 basis points. Management noted that it may revisit the order inflow guidance after Q2, given that award timelines for large tenders can shift.

Cash discipline: debt reduction, working capital, and operating resilience

KPIL’s Q1 FY27 update continued to emphasize balance sheet discipline. Consolidated net debt was INR 917 crores at 30 June 2026, down 67% year on year. Net debt to equity was stated at 0.1x.

Working capital improved as well, with consolidated net working capital days at 80 in Q1 FY27 versus 91 in Q1 FY26. Management highlighted that net debt remained stable quarter on quarter despite higher execution, capex of over INR 250 crores in the first three months, and increased capital employed in the water business.

On the call, management also pointed to execution challenges that did not derail the quarter. It referenced early quarter labor shortages due to state elections and supply chain constraints in international markets, partly stemming from disruptions in the Middle East. Despite these, KPIL reported margin expansion.

Water: collections remain the key variable, but the Middle East entry matters

Water remains the most cash sensitive part of KPIL’s portfolio. Management said water execution was aligned to the planned pace, but collections were a constraint. In Q&A, management stated billed plus unbilled receivables in water were around INR 1,500 crores, representing work done but pending collection. It also stated that the Jal Jeevan Mission order book was around INR 4,000 crores.

At the same time, KPIL reported a strategic milestone. It secured its first Middle East water treatment project valued at INR 344 crores. Management said it is also looking at desalination projects in the Middle East and is already qualified for several opportunities. It described initial margins as positive but not yet at the levels of T&D, B&F and Oil and Gas, which it characterized as closer to double digit EBITDA.

Oil and Gas and international positioning: the focus is the Middle East

KPIL’s commentary on Oil and Gas was centered on qualification and bid activity with large Middle East customers. Management stated that the company is qualified with large utilities in the region including Saudi Aramco and ADNOC, and has submitted bids ranging from USD 100 million to USD 500 million. It said tender awards have been delayed but expects to win a few large projects in the current year, potentially in the next three to six months.

The company also clarified that it is not exploring offshore opportunities and is focusing on onshore pipelines, process lines and plants.

Capex and backward integration: the next layer of execution strategy

KPIL has continued to invest in capabilities, equipment and manufacturing. Management guided for capex of around INR 800 crores in FY27.

It also announced that it will set up a rolling mill in Raipur as part of backward integration, and said it is exploring backward integration across other products in its value chain. While the company did not share targeted returns or timelines for the rolling mill, it positioned backward integration as a lever for both growth and profitability.

Takeaways

KPIL’s Q1 FY27 results reinforced the operating strengths of its diversified EPC model. Revenue growth in core businesses was steady, but the larger story was margin expansion driven by operating leverage, mix, lower finance costs and tighter working capital.

The record order book of INR 66,607 crores and the stated L1 pipeline provide visibility, while FY27 guidance remains firm at at least 15% revenue growth and over 75 basis points improvement in PBT margin. The key variables to watch are water collections in domestic JJM projects and award timing for large Middle East tenders, both of which can influence execution pace and cash conversion over the next few quarters.