Welspun Enterprises Q4 FY26: Margin Expansion, Strong Order Book, and a New DBFOT Milestone

Welspun Enterprises closed Q4 FY26 with a sharp improvement in profitability even as full-year revenue stayed broadly steady. On a consolidated basis, Q4 revenue rose to 1,199 crore, up 14% year-on-year, while EBITDA grew faster at 272 crore, up 31%. The result was a quarterly EBITDA margin of 22% versus 19.3% a year ago. Profit after tax for the quarter increased to 163 crore, up 54%.

For FY26, consolidated revenue was 3,615 crore, a 2% decline year-on-year. But operating performance improved meaningfully. EBITDA rose to 845 crore, up 16%, and margins expanded to 22.8%, a 350 bps improvement. PAT for FY26 was 393 crore, up 11%. Management attributed the improvement to disciplined execution, efficiency, cost optimisation and a better project mix.

A key narrative point for FY26 was that the company’s order book and balance sheet remain central to the strategy. The investor presentation reported a consolidated order book of 19,739 crore, while management referred to it as approximately 20,000 crore on the earnings call. The balance sheet snapshot showed cash and cash equivalents of 1,728 crore and net debt of 43 crore as of March 31, 2026.

The operating mix: water, transport, and tunnelling

Welspun’s portfolio spans roads, water and tunnelling, and the order book mix highlights where the company expects execution visibility. The presentation reported an order book split of 54% water, 30% transport and 12% tunnel, with smaller shares in pumping, rehabilitation and others. By category, the order book was split across EPC at 43%, O&M at 27%, BOT at 27% and HAM at 2%.

Management commentary suggested that FY26 segment outcomes were influenced by project timing. The CFO noted that tunnelling and rehabilitation revenue grew 37% year-on-year, while water revenue declined marginally by 3% due to slower execution in the UP Jal Jeevan Mission project. Transportation revenue fell 17% year-on-year, primarily due to project completion and delays in awarding the Pune-Shirur project.

Financial snapshot (consolidated)

Pune–Shirur: a large DBFOT addition with long duration economics

A major development highlighted in management’s opening remarks was the Letter of Award for the Pune–Shirur Elevated Road project. The transportation CEO described the project as a 6-lane partially elevated corridor on NH-753F spanning about 53.4 km, including nearly 36 km of elevated corridor. The project is under a design, build, finance, operate and transfer model.

Management stated the total project cost is approximately 7,300 crore with a 29-year concession, including 4 years of construction followed by 25 years of tolling rights. In response to an analyst question, management said the EPC cost component is about 5,400 crore.

Near-term revenue contribution will depend on financial closure and the appointed date. Management said financial closure is targeted around October or November 2026, and the project could contribute around 500 crore to 600 crore to FY27 revenue through initial development and early execution works. On returns, management reiterated an internal governance principle of targeting equity IRR upwards of 18% for such projects and said they are targeting similar returns here, while indicating that more detailed economics would be discussed separately with the finance and IR teams.

Water platform: multi-year projects with long O&M tails

The water business remains a large component of the order book and is increasingly anchored by long-duration O&M phases. Management provided detailed updates across key projects.

For the Dharavi Wastewater Treatment Facility, a 418 MLD project described as a first-of-its-kind multi-storeyed plant due to space constraints, management said physical completion is around 65%. Commissioning is targeted by July 2027, followed by a 15-year O&M phase.

On the UP Jal Jeevan Mission rural water supply projects, management said progress is around 80% and completion is expected in FY27. For the Bhandup 2,000 MLD water treatment plant, excavation and early civil works are underway, with overall progress around 20% and completion targeted by June 2029. The Panjrapur 910 MLD project is in the early stages with mobilisation underway, advances received and initial billing started.

The water conveyance tunnel from Dharavi to Ghatkopar remains dependent on clearance timelines. Management said the company is awaiting the final high court clearance, after which shaft work is likely to commence.

WMEL: tunnelling and rehab engine with stable margins

Welspun Michigan Engineers (WMEL), a 60.09% subsidiary, continued to scale in FY26. WMEL reported FY26 revenue of 874 crore, up 31% year-on-year, with EBITDA of 185 crore and an EBITDA margin of 21%. For Q4 FY26, revenue was 351 crore and EBITDA was 74 crore.

Management noted a shift in revenue composition within WMEL: rehabilitation projects contributed about 28% of FY26 revenue, up from 17% in FY25. The subsidiary’s order book was reported at about 2,305 crore as of March 31, 2026, with an order book mix of 60% tunnel, 23% pumping, 9% rehabilitation and 9% others. Management said WMEL is targeting a CAGR of over 25% over the next three years, and guided to about 20% revenue growth for FY27.

Capital allocation and asset monetisation remain core levers

Welspun continues to emphasise an asset-light strategy. Management highlighted monetisation of completed road assets as a key part of capital recycling. On the call, they stated that Aunta–Simaria has received the first annuity payment and the company is in advanced stages of monetising the asset, targeting H1 FY27 subject to valuation. For Sattanathapuram–Nagapattinam (SNRP), management said monetisation would be targeted after completion and receipt of the first annuity, potentially in FY28.

On fundraising, management clarified that a proposed 1,000 crore enabling approval is not a current plan to raise funds. They also stated that 250 crore has been received through preferential warrants and the remaining 750 crore can be called over 18 months from the start of the warrant period.

Guidance and what to track next

Management reiterated a medium-term revenue growth guidance range of 15% to 20%. They also guided EBITDA margin at 18% plus, flagging potential near-term execution and cost challenges due to supply chain and labour issues amid geopolitical disruptions. The company guided FY27 order inflows of 8,000 crore to 10,000 crore.

The near-term operating debate is likely to centre on three items. First, the pace of execution ramp-up on Pune–Shirur post financial closure and appointed date. Second, progression on large water projects where commissioning and O&M phases create long visibility but require steady execution. Third, whether tunnelling and rehabilitation continue to provide a favourable mix and stable margins, especially through WMEL.

In FY26, Welspun Enterprises demonstrated that even in a flat revenue year, disciplined execution and project mix can drive stronger profitability. With a reported order book near 20,000 crore, a low net debt position and explicit monetisation intent on mature road assets, the company is positioning for the next leg of growth while keeping capital recycling at the centre of strategy.