Transrail FY26: Record revenue, stronger cash flow, and a bigger manufacturing base

Transrail Lighting Limited ended FY26 with its highest ever revenue and profit, even as the March quarter showed a softer run rate. For the full year, revenue from operations rose to 6,880 crore, up 30 percent year on year and ahead of the company’s 25 percent growth guidance. EBITDA increased 21 percent to 820 crore, while profit after tax for the year was reported at 421 crore, up 28 percent year on year.

The quarter was more mixed. Q4 FY26 revenue from operations came in at 1,863 crore versus 1,946 crore in Q4 FY25. EBITDA declined to 207 crore from 237 crore, and PAT fell to 97 crore from 127 crore. Margins also eased in the quarter, with EBITDA margin at 11.1 percent versus 12.2 percent a year earlier. Even so, the full-year picture shows a company that is scaling quickly, strengthening its balance sheet, and investing to expand capacity for the next phase of growth.

Transrail’s FY26 story has three linked themes. First, execution stayed high across complex domestic and international projects, supported by an integrated manufacturing platform. Second, order momentum remained strong, with inflows outpacing revenue and keeping the order book at an elevated level. Third, working capital discipline and collections translated into a sharp improvement in operating cash flow and lower net debt.

A year of heavy execution and expanding reach

Transrail operates across power transmission and distribution, substations, civil construction, railways, poles and lighting, and solar EPC. But the current revenue engine and the order book are still dominated by the power T and D business. In FY26, power T and D represented 89 percent of order inflows and 92 percent of the unexecuted order book as of March 31, 2026.

Operationally, the company highlighted the execution of 1,900 circuit kilometers of transmission lines during FY26. It also completed Phase 1 of a Bangladeshi river crossing transmission line, supplied 150,000 metric tonnes of towers, and supplied 4,345 km of conductors during the year, while also noting 31,000 km of conductor supplied including HTLS conductors as part of business highlights. The year included more than 20 large-scale projects completed globally, including 7 projects of 765 kV in India.

A marquee domestic commissioning in FY26 was the 765 kV double-circuit Khetri to Narela transmission line, described by the company as a key inter-state corridor that evacuates 8.1 GW of renewable energy from Rajasthan to Delhi NCR. This kind of project matters because it is directly tied to India’s renewable integration and evacuation requirements, which in turn are driving long-duration investments into transmission infrastructure.

Internationally, Transrail commissioned projects such as the 230 kV DC Line Rupoor to Dhamrai in Bangladesh, a 138 kV substation and transmission line project in Nicaragua, and a 132 kV transmission line project in Eswatini. The company also reported entry into new international markets during FY26, including Abu Dhabi, Tunisia, Djibouti, and Botswana. Alongside turnkey execution, it secured supply orders for towers and conductors in markets such as the Philippines, Oman, and the USA.

This breadth matters to investors because the order book mix is balanced between domestic and international work. In FY26 inflows, domestic accounted for 63 percent and international 37 percent. In the unexecuted order book as of March 2026, domestic was 61 percent and international 39 percent. This reduces single-market risk and can help smooth the project cycle, although it also introduces execution complexity, working capital variability, and currency or geopolitical exposure.

Financial performance: record year, softer quarter

FY26 was record-breaking on topline and profits, but margins moderated compared to FY25. Full-year EBITDA margin was 11.9 percent versus 12.7 percent in FY25. PAT margin based on the headline FY26 PAT number of 421 crore was 6.1 percent versus 6.1 percent in FY25. The company also clarified that the headline PAT excludes a 17 crore provision made in Q3 FY26 towards a new labour code. In the results table that includes the exceptional item impact, FY26 profit after tax is shown at 404 crore, with profit after tax margin at 5.8 percent.

The Q4 FY26 numbers show the near-term pressure. Revenue declined 4 percent year on year. EBITDA dropped 13 percent and PAT declined 24 percent. Depreciation and amortisation increased, and other income was lower. Finance costs declined in Q4 but increased 11 percent for the full year.

Two investor-relevant points stand out from the FY26 income statement. One, operating profit before tax grew 25 percent year on year in FY26, indicating that the company’s earnings power expanded meaningfully with scale. Two, margin softness suggests that the growth came with cost pressures typical of EPC and manufacturing-heavy businesses, where commodity costs, project mix, and execution schedules can swing margins.

The cash flow and balance sheet metrics are where FY26 looks strongest. Operating cash flow more than doubled to 816.89 crore from 415.08 crore. Net debt excluding IPO funds declined to 274.16 crore from 502.01 crore. Net debt to EBITDA improved to 0.33x in FY26 from 0.74x in FY25. Debt to equity also improved to 0.29x from 0.34x.

These shifts suggest that, despite rapid revenue growth and ongoing capex, the company managed working capital and collections well enough to reduce leverage. Working capital days improved to 81 in FY26 from 91 in FY25, though it remains higher than FY23 levels.

Credit rating improvement reinforces this balance sheet direction. The company reported a long-term credit rating of CRISIL AA minus stable and IND A plus positive, with the CRISIL upgrade dated August 5, 2025 and reaffirmation on March 4, 2026. Short-term ratings were CRISIL A1 plus and IND A1 plus.

Order book and capacity: positioning for FY27 and beyond

Transrail’s reported FY26 order inflow was 8,520 crore. The unexecuted order book as of March 2026 was 16,313 crore. Including L1 of 48 crore, the total unexecuted order book was 16,361 crore.

The scale of the order book versus annual revenue offers visibility. With FY26 revenue at 6,880 crore and order book including L1 at 16,361 crore, the backlog is materially larger than one year’s revenue, even after a year of strong execution.

The segment mix also gives clues on what management is prioritising. Power T and D remains the core, but there is incremental diversification. Inflows included 6 percent civil, 2 percent railways, and 3 percent pole and lighting. The company also stated it bagged 3 new civil projects and 3 new railway projects in FY26. For investors, the key question is whether these adjacent verticals can scale without diluting return ratios or increasing working capital intensity.

Capacity expansion is a central part of the near-term plan. The company stated it successfully doubled tower manufacturing capacity to 172,400 MTPA in FY26 through greenfield and brownfield expansions. The capex slide also lays out a broader capacity plan across phases. Towers move from 84,000 MT per annum pre-capex to 1,96,000 MT per annum post Phase 1 and Phase 2. Conductor capacity increases from 24,000 km to 49,500 km.

Timelines are staggered. Tower expansion phase 1 and phase 2 were completed. For conductors, phase 1 is targeted by Q1 FY27, and phase 2 by Q2 FY27. This matters because conductors and towers are key inputs for the company’s own EPC work and also a supply opportunity in the market. A larger manufacturing base can support better control on timelines and potentially reduce reliance on third-party suppliers, a point the company emphasised as part of its backward integration.

The board also approved additional capex of 203 crore on May 26, 2026, mainly for procuring equipment for site construction. That signals management’s intent to build execution capacity, not just factory output. In EPC, on-ground equipment and tooling often determine the speed of project completion and the ability to take on multiple large sites.

Tailwinds: grid expansion, renewable evacuation, and global electrification

Transrail’s presentation anchors its growth outlook in both Indian and global transmission tailwinds. In India, it cites the National Electricity Plan estimate of 191,000 circuit kilometers of transmission line addition by 2032, which is 38 percent of India’s total grid. It also references India’s 500 GW non-fossil capacity target by 2030, which implies ongoing demand for evacuation corridors and grid reinforcement.

The company also points to policy support around integrating 1150 kV UHV lines, rising private sector participation through TBCB projects, and a planned 9.15 lakh crore transmission investment by 2032 under the National Electricity Plan.

Globally, the cited themes include accelerating grid investments driven by renewables, EVs, and storage; a view that global electricity demand could nearly double by 2050; Africa’s electrification push through Mission 300 to connect 300 million people in Sub-Saharan Africa to electricity by 2030; and broader adoption of smart grid technologies and cross-border power connectivity.

These tailwinds align with Transrail’s geographic footprint. The company has presence across 63 countries and highlighted deep experience in Africa, alongside activity in SAARC, Southeast Asia, GCC, and supply exposure to the Americas.

What to watch after a record FY26

Transrail ended FY26 by combining high growth with balance sheet improvement, which is not easy in project-led businesses. Revenue growth of 30 percent was supported by large-scale execution and a steady inflow engine. The order book including L1 at 16,361 crore provides multi-year visibility, and the domestic-international split reduces reliance on a single market.

At the same time, the Q4 softness and the full-year margin decline show that scale alone does not guarantee better profitability. Investors should track three practical markers in FY27.

First, how margins behave as the company ramps output from expanded tower and conductor capacity, and as the project mix shifts between domestic and international sites. The company stated a focus on margin-led qualitative order book, and FY27 results should reveal whether that translates into steadier EBITDA margins.

Second, whether operating cash flow remains strong. FY26 operating cash flow of 816.89 crore was a highlight, supported by improved collections and working capital efficiencies. Sustaining this while executing a growing backlog will be key for keeping leverage low.

Third, whether capex translates into faster execution and higher throughput without increasing working capital days again. Working capital improved in FY26, but EPC cycles can reverse quickly when project schedules change.

The close to FY26 also included a dividend declaration of 100 percent, or 2 per equity share, for the year ended March 31, 2026. In combination with lower net debt and upgraded credit ratings, that signals confidence in cash generation.

Transrail’s FY26 theme can be summarised as disciplined execution at scale. The company has positioned itself around a long runway in grid expansion, backed by integrated manufacturing and widening geographic reach. If it can protect margins and maintain cash flow while absorbing the new capacity, FY27 could be less about proving growth and more about improving the quality of that growth.