SRM Contractors in FY26: A sharp scale-up, a bigger order pipeline, and a new subsidiary

SRM Contractors Limited closed FY26 with a step-change in scale. Consolidated revenue from operations rose to INR 1,026 crore versus INR 528 crore in FY25, while EBITDA grew to INR 177 crore and profit after tax (PAT) reached INR 111 crore. In Q4 FY26, revenue from operations was INR 446 crore, EBITDA INR 80 crore, and PAT INR 54 crore. Management attributed the performance to improved execution.

Beyond the numbers, the year also included a strategic acquisition and a sharper positioning around difficult-terrain infrastructure. SRM continues to describe itself as a specialist in roads, bridges, tunnels, and slope stabilisation across high altitude and remote geographies. The investor presentation highlights landmark projects and external recognition, while the earnings call focused on order visibility, capex-led capacity build-up, and how the acquisition changes the company’s footprint.

FY26 performance: growth led by execution momentum

SRM’s consolidated FY26 financials show rapid growth across the P and L. Revenue from operations increased 94% YoY to INR 1,026 crore. EBITDA rose 86% YoY to INR 177 crore, with an EBITDA margin of about 17.3%. PAT increased 102% YoY to INR 111 crore, translating into a PAT margin of about 10.8%.

In Q4 FY26, revenue from operations rose 96% YoY to INR 446 crore. EBITDA was INR 80 crore and PAT was INR 54 crore. The quarterly margin profile, as per the presentation table, shows EBITDA margin of about 17.9% and PAT margin of about 12.1%.

One point to note from the conference call is that management and the CFO referenced regrouping and reclassification of expenses during the year due to an auditor change and Ind AS adoption. The company stated that the FY26 numbers have been classified consistently for the full year, but quarter-to-quarter line items such as gross profit and other expenses may not be directly comparable.

Order book visibility: March snapshot vs current work-in-hand

As of March 2026, the investor presentation states an order backlog of about INR 1,843.87 crore. The same deck provides an order book mix: Roads and Bridges INR 1,276.72 crore (69%), Tunnels INR 123.77 crore (7%), and Slope Stabilisation INR 443.38 crore (24%).

During the earnings call, management discussed a larger work-in-hand figure as of the call date: about INR 3,000 crore. They clarified that the INR 3,000 crore is unexecuted order book and includes both SRM and MIPL. Management broke it down as about INR 2,112 crore from SRM and more than INR 850 crore from MIPL.

This distinction is important for investors tracking momentum. The March-end order book in the presentation is stated as standalone, while the call’s updated figure reflects orders won after March and the consolidated inclusion of the acquired subsidiary.

Management also provided color on execution timelines, stating that roads are typically around two years to complete, while slope projects are often about one year, sometimes extending to 1.5 years. The investor presentation also cites an average completion time of 18 to 24 months.

Strategic shift: acquisition of MIPL and a broader slope stabilisation push

The headline strategic event in FY26 was SRM’s acquisition of a 51% stake in Maccaferri Infrastructure Pvt. Ltd. (MIPL). The investor presentation positions this move as strengthening SRM’s geotechnical and environmental solutions capability, including products and systems such as geosynthetics, gabions, rockfall protection, and tunnelling systems.

On the call, the CFO explained the consolidated reporting implications. A non-controlling interest appeared in FY26 because SRM owns 51% of MIPL and the remaining 49% is treated as non-controlling interest. Management also stated that a final instalment of INR 19 crore was due in June 2026 to complete the 51% stake purchase.

The company shared revenue data for MIPL during the call. MIPL’s revenue for the year was stated as INR 267 crore, of which INR 172 crore was post-acquisition (after 22 October, when SRM gained control). Management also discussed MIPL profitability in percentage terms, indicating improvement post-acquisition.

The narrative behind the acquisition is clear. SRM sees slope stabilisation as a higher-margin, higher-entry-barrier niche than commoditised road EPC. Management also indicated that slope stabilisation is being pursued on a pan-India basis, while road infrastructure focus is concentrated largely in Maharashtra.

Capex and debt: equipment-led capacity build

The company disclosed FY26 capex of INR 152 crore. In the call, management and the CFO linked the increase in debt to equipment financing, stating that around INR 130 crore of the capex was funded by new debt.

The investor presentation’s debt section shows gross debt (long-term plus short-term) rising to INR 13,471 lakhs (INR 134.71 crore) in FY26, from INR 4,089 lakhs (INR 40.89 crore) in FY25. The company also cites a CARE Edge Ratings upgrade of long-term bank facilities from CARE BBB+ to CARE A- on 1 July 2025.

Management described an internal approach of using project-linked equipment debt. They stated that when a new project is won, equipment is financed through debt for that project and is paid off through the cash flows of that project, while surplus cash is deployed to other projects.

For FY27, management indicated expected capex of about INR 250 crore, while also stating that estimating year-end debt precisely would depend on financing options and market conditions.

FY27 guidance and growth expectations

SRM’s investor presentation provides FY27 guidance ranges. Revenue guidance is stated as INR 1,400 to 1,750 crore. EBITDA margin guidance is 16 to 18% plus. PAT and PAT margin guidance is 9 to 11%.

During the call, management also talked about consolidated turnover between INR 1,500 and INR 1,750 crore. In response to a question, management cited PAT guidance around 8.75% to 10.25% in one instance, which differs from the presentation range. Investors may want the company to reconcile the PAT margin range more clearly in future disclosures.

The FY27 bid pipeline was stated as INR 6,000 crore, and management expressed an expectation of conversion of more than 60% to 70% from that pipeline. They also described a medium-term ambition of reaching around INR 3,000 crore topline three years down the line and suggested an order book level of more than INR 4,000 crore by end of FY27, after factoring annual execution.

On diversification, the presentation states intent to expand into Hybrid Annuity Model (HAM) projects. However, management clarified on the call that the company has not secured any HAM project till date, even though it continues to bid.

International expansion was also discussed. Management stated that the Abu Dhabi branch office has been advanced or established as a gateway for opportunities in the GCC and select African markets. On the call, they said discussions are ongoing with clients in Oman and the UAE, but no confirmed international orders are included in current projections.

What to track from here

SRM’s FY26 outcome is a combination of higher execution throughput and a step-up in capability via the MIPL acquisition. The company is positioning itself as an infra specialist in difficult terrains, while seeking to build a larger and more diversified project pipeline.

The main investor watchpoints appear to be the pace of order inflows versus the guided growth, the impact of higher capex and equipment debt on balance sheet strength, and the clarity of consolidated disclosures as the subsidiary’s contribution increases. Management also indicated that margins are better in slope stabilisation than in roads, and that roads are more competitive, with a lower strike rate.

If SRM can sustain execution quality while integrating MIPL and scaling pan-India slope stabilisation, FY27 becomes a test of whether the company’s niche positioning can translate into consistent, predictable growth.