Tara Chand FY26: Margin Expansion, Heavy Capex, and a Clear FY27 Growth Target

Tara Chand Infralogistic Solutions Limited closed FY26 with its highest reported revenue and profitability, while also carrying the near-term cost burden of a large fleet expansion. Revenue from operations increased 14.9 percent year on year to INR284.8 crore. EBITDA rose 27 percent to INR106.7 crore, and the EBITDA margin expanded to 37.05 percent, a rise of roughly 400 basis points. Profit after tax grew 12 percent to INR27.8 crore.

Management repeatedly emphasized Cash PAT as a better indicator of earning power for a capital-intensive equipment rental model. Cash PAT, defined as PAT plus depreciation, increased 27 percent to INR87.0 crore in FY26. That gap between EBITDA growth and PAT growth was explained by higher depreciation and finance costs following two consecutive years of meaningful capex.

Segment mix: equipment rentals drive the story

The company operates across three reported segments: Equipment Hiring and Projects, Warehousing and Transportation, and Steel Processing and Distribution. In FY26, Equipment Hiring and Projects contributed 60 percent of revenue, Warehousing and Transportation contributed 37 percent, and Steel Processing and Distribution contributed 3 percent.

Equipment Hiring and Projects revenue grew to INR170.0 crore in FY26 from INR137.7 crore in FY25, with a reported EBITDA margin of 52 percent for FY26. The investor presentation also disclosed that reported margins include specialized services, and that stand-alone equipment rentals achieved EBITDA margins of 62 percent in FY26 and 59 percent in Q4 FY26.

Warehousing and Transportation revenue increased to INR106.5 crore in FY26 from INR97.4 crore in FY25, with EBITDA margin steady at 16 percent. Management noted that Q4 performance in this segment was impacted by the planned conclusion of the 7-year RINL stockyard contract at Visakhapatnam at the end of Q3 FY26 and the stabilization phase at the new Dankuni stockyard.

Steel Processing and Distribution declined to INR8.4 crore in FY26 from INR12.8 crore in FY25, with EBITDA margin at 2 percent. Management stated it is consciously de-emphasizing this lower-margin segment.

Capex cycle: higher depreciation today, more capacity for tomorrow

FY26 was the second consecutive year of elevated capital expenditure, with capex of INR143.4 crore. Management stated cumulative capex across FY25 and FY26 was about INR290 crore, taking the gross block to INR558.1 crore as of March 2026 and the net block to INR355.0 crore.

The fleet expanded to 427 owned machines, with 59 new machines added in FY26. The company highlighted high-capability assets such as a 900 MT all-terrain crane, 800 MT crawler cranes, aerial working platforms, piling rigs, prime movers, and trailers. Management framed this fleet profile as an entry barrier that supports premium yields and high rental margins.

This capex cycle flowed through the income statement. Depreciation rose to INR59.2 crore in FY26 from INR43.7 crore in FY25. Finance cost increased to INR10.3 crore from INR7.2 crore. Management pointed to these as the primary reasons PAT growth was slower than EBITDA growth, and guided that the revenue contribution from the expanded fleet should accrue progressively through FY27 and beyond.

Operationally, the company reported average fleet utilization of about 83 percent and stated that a best-case sustainable occupancy level across a full year is around 85 to 86 percent. Management also indicated that movement and redeployment of very large machines can create temporary idling and logistics costs, which can compress margins in certain quarters.

What changed in Q4: revenue deferral and Dankuni ramp-up

In the concall, the CFO addressed a specific miss versus an earlier internal milestone. The company had earlier targeted Q4 revenue of INR100 crore plus but reported revenue from operations of INR89.5 crore. Management attributed the shortfall largely to about INR10 crore of revenue deferred to Q1 FY27 due to project execution delays on the client side. Management also said revenue from the newly started Dankuni stockyard did not take off in Q4 as previously estimated.

Working capital was another focus area. Receivable days increased to 93 in FY26 from 75 in FY25, against the company’s internal target of about 80 days. Management attributed this to receivables related to closure procedures for the RINL contract and to March billing that is collected in Q1. Management stated it aims to bring receivable days back toward 80 during FY27 and expects substantial recoveries through the first half of FY27.

FY27 guidance: growth, margins, capex, and leverage discipline

Management laid out a clear FY27 framework. The company targets 20 to 25 percent revenue growth, EBITDA margins in the 37 to 38 percent band, and capex of INR80 to 100 crore. It reiterated a leverage ceiling of 1.0x net debt to equity, and stated that net debt to equity stood at 0.9x as of March 2026.

The order book executable in FY27 was stated at INR211.7 crore, with 64 percent from Equipment Hiring and Projects and 36 percent from Warehousing and Transportation.

Within specialized services, management stated FY26 specialized services EBITDA margin was about 18 percent, consistent with its 18 to 20 percent target range. It also stated specialized services revenue closed at about INR38 crore in FY26 and that it sees opportunity to push upwards of INR50 crore in FY27. For stand-alone equipment rentals, management said it targets 25 to 30 percent growth in FY27.

Subsidiary Metallix: early-stage diversification, details pending

During FY26, the company incorporated Tarachand Metallix Limited as a 100 percent wholly owned subsidiary on Jan 06, 2026. The investor deck described it as a metal processing and manufacturing platform focused on high frequency beams, fabrication and cutting, and value-added metal solutions. The investment snapshot disclosed initial capital of INR25 lakhs, funded via cash consideration.

In the concall, management said it is in advanced discussions with clients and expects to finalize the investment plan and operational timeline over the next 2 to 3 quarters. It stated operations are expected to be based out of Nagpur, and indicated that meaningful operations could take off around the second half of FY28. Management also acknowledged investor questions around consolidated margin impact and said it would not pursue initiatives that erode overall margins, but did not provide measurable economics yet.

Takeaways

FY26 shows a company that is leaning into a higher-margin equipment rental mix while continuing to invest heavily in fleet capability. The main debate for FY27 is not whether the company has invested, but whether it can convert that investment into faster revenue growth while tightening working capital. Management’s guidance of 20 to 25 percent revenue growth, EBITDA margins of 37 to 38 percent, and capex of INR80 to 100 crore provides a clear scorecard for the year ahead.

The near-term swing factors remain the pace of execution in specialized services, the ramp-up of the Dankuni stockyard, and the normalization of receivable days following the RINL contract closure process. If these variables align, the company’s stated framework of scale, specialize, and sustain will be tested in a year where the fleet is already built and the focus shifts to utilization, yields, and cash conversion.