/** Transrail delivers record FY26 results but guides for softer FY27 margins */

Transrail delivers record FY26 results, but guides for a tougher margin year

Transrail Lighting Limited ended FY26 with its highest ever revenue, EBITDA, and profit after tax since listing. Consolidated revenue from operations rose to INR 6,880 crore, up 30% year on year. EBITDA increased to INR 820 crore, up 21%, while operational profit after tax was INR 421 crore, up 28%. The year also marked a visible step-up in cash generation and leverage improvement.

The March quarter looked weaker on the surface. Q4 FY26 revenue from operations declined 4% year on year to INR 1,863 crore, and EBITDA fell 13% to INR 207 crore. Management attributed the softness to the natural cycle of EPC execution. A set of projects closed by December, while several newer projects moved into early stages such as design, engineering, and approvals. The company also cited supply chain disruptions in February and March as an added factor.

Even with a softer Q4, FY26 ended ahead of guidance. Management reiterated that it had guided about 25% revenue growth at the start of the year, revised it to 27% during the year, and eventually delivered 30%.

A year of scale and execution

Transrail’s FY26 narrative is primarily driven by execution intensity and order book strength. The company highlighted delivery of 1,900 circuit kilometres of transmission lines, supply of 150,000 metric tonnes of towers, and supply of more than 4,000 kilometres of conductors in the year. It also completed Phase 1 of a Bangladesh river crossing transmission line and advanced Phase 2.

On the domestic side, the company commissioned multiple 765 kV transmission line projects for Power Grid Corporation of India and cited the 765 kV double-circuit Khetri to Narela line as a landmark corridor supporting renewable evacuation from Rajasthan to Delhi NCR. Internationally, it commissioned projects in Bangladesh, Nicaragua, and Eswatini and recorded supply orders in markets such as the Philippines, Oman, and the US.

The order book continued to expand. As of March 2026, unexecuted order book stood at INR 16,313 crore, and total unexecuted order book including L1 was INR 16,361 crore. The order book remains predominantly Power T and D.

Financial snapshot

Note: Management also presented FY26 PBT and PAT after considering an exceptional item related to an additional provision under the new labour code.

Order book quality and visibility

For FY26, order inflow was INR 8,520 crore, with 63% from domestic and 37% from international markets. Segment mix of the year’s order inflow was 89% Power T and D, 6% civil, 2% railways, and 3% pole and lighting.

As of March 2026, the unexecuted order book mix was 61% domestic and 39% international. Segment mix of the order book was 92% Power T and D, 5% civil, 2% railways, and 1% pole and lighting.

During the call, management linked the order book directly to visibility for FY27 execution and stated it has visibility to deliver revenue growth of 20% to 22%. Management also said it is being selective in bidding, focusing on margin-led order book quality.

On pipeline, management stated it had bid about INR 10,000 crore worth of projects in Q1 so far and is awaiting results. It also indicated a broader domestic opportunity set of INR 80,000 crore to INR 1,00,000 crore where the company can participate, and an international opportunity set of about INR 50,000 crore.

Balance sheet improvement and cash flow discipline

FY26 showed meaningful improvement in operating cash and leverage.

The company reported cash flow from operations of INR 816.89 crore in FY26, more than double the INR 415.08 crore recorded in FY25. Working capital days improved to 81 days from 91 days. Management attributed this to improved collections, efficient project execution, and tighter control over working capital.

Net debt, excluding IPO funds, declined to INR 274.16 crore from INR 502.01 crore. Net debt to EBITDA improved to 0.33x in FY26 from 0.74x in FY25. Debt to equity also continued its multi-year decline to 0.29x in FY26.

Credit rating momentum was another highlight. The investor presentation disclosed long-term ratings of CRISIL AA minus stable and IND A plus positive, and short-term ratings of CRISIL A1 plus and IND A1 plus.

The company also announced a dividend recommendation of 100% on equity share capital, which is INR 2 per share for FY26.

Capex, capacity, and the push for productivity

Transrail’s FY26 strategy focused heavily on scaling manufacturing capacity and improving execution capability.

The company stated it doubled tower manufacturing capacity to 172,400 MTPA in FY26 through a mix of greenfield and brownfield projects and commissioned a new tower plant at Butibori in April 2026. The capex plan in the presentation targeted a rise in tower capacity from 84,000 MT per annum pre-capex to 196,000 MT per annum post Phase 1 and Phase 2.

Conductor capacity expansion is also underway. The company’s plan targets growth from 24,000 kilometres to 49,500 kilometres.

On the earnings call, management linked capital work in progress to the remaining step-up from 172,000 to 196,000 MT in towers and the conductor expansion. The CFO said pending capex is expected to be completed by Q2 FY27, after which CWIP will be capitalised.

In addition, the Board approved incremental capex of INR 203 crore on 26 May 2026, mainly for construction equipment. Management clarified this is for improving construction productivity and replacing some older machinery, and is separate from the earlier manufacturing expansion capex.

What to watch in FY27: growth intact, margins guided lower

Management provided forward guidance for FY27. It guided revenue growth of 20% to 22% and an EBITDA margin of about 11%.

The margin guidance is the key change versus FY26. Management cited geopolitical uncertainty and inflation, including fuel prices, shipment costs, and insurance costs. It also discussed supply chain disruption as a key factor that can defer revenue recognition in EPC execution.

The company also addressed the question of input price escalation. Management said about 30% to 35% of jobs have price variation clauses, allowing pass-through of certain commodity increases. This partial protection, along with the company’s view of disruption risk, shaped the more conservative margin guidance.

The overall positioning remains consistent. Transrail continues to frame its opportunity set around a multi-year transmission infrastructure investment cycle, driven by renewable integration, grid modernisation, and new HVDC projects. In India, the presentation pointed to large transmission investments planned under the National Electricity Plan.

Takeaways

Transrail’s FY26 performance strengthens the investment case built around scale, execution, and backward-integrated manufacturing. The year delivered record revenue and profits, a rising order book, and a sharp improvement in operating cash flows, alongside reduced leverage and stronger credit metrics.

FY27 guidance introduces caution on margins, mainly due to geopolitical and supply chain uncertainties. Still, management maintains confidence in delivering 20% to 22% revenue growth, supported by a INR 16,361 crore unexecuted order book including L1 and an order inflow target of INR 10,000 crore to INR 11,000 crore.

The next 12 months will likely be judged on two things: how smoothly the expanded manufacturing footprint translates into execution throughput, and whether margin resilience holds up in an uncertain cost environment.