Capital Infra Trust Q4 FY26 Earnings Analysis

- Capital Infra Trust plans to add 4 to 7 assets in FY27, increasing AUM from Rs. 6,733 crores to around Rs. 9,000-10,000 crores. - The pipeline includes 14 ROFO HAM assets from sponsors, with 7 expected by FY27 and another 7 by H1 FY29. - Third-party HAM asset acquisitions are in early evaluation stages, expected to further diversify and accelerate annuity inflows. - NHAI's increased road sector allocation (Rs. 3.09 lakh crores) and 124 new project bids, about 72% under HAM model, create a strong acquisition pipeline. - Traffic volumes rose 16% post-portfolio expansion, carrying approximately 28 lakh vehicles monthly. - The Trust targets sustainable cash yields of 11%-12% DPU, supported by predictable HAM asset cash flows. - Optimized leverage and lower borrowing costs strengthen the base for structurally stronger growth ahead.

- Capital Infra Trust expects a structurally stronger growth phase driven by optimized leverage, lower borrowing costs, and immediate contributions from newly acquired assets (Page 16). - Acquisition-led growth remains a key strategy with plans to add 4 to 7 assets next financial year, expanding AUM from Rs. 6,733 crores to Rs. 9,000-10,000 crores by FY27 (Page 5). - Stable and predictable cash flows from HAM assets underpin optimistic earnings visibility (Page 4). - Operational stability is maintained with all annuities received on time and road quality confirmed by NHAI inspections, supporting steady income (Page 13). - Debt rationalization and refinancing have reduced interest costs, improving net debt-to-EV ratio and strengthening free cash flow (Page 4). - EBITDA and net profit stable with a slight dip due to one-off items; underlying operations remain strong (Page 6). - FY27 earnings guidance to be shared in March 2026, with expected cash yield guidance of 11%-12% for current financial year (Pages 9, 14).

- Major maintenance capex is planned starting FY27, with a major maintenance cycle budgeted over the next 3 years for the 12 assets. - The Bangalore SPV will incur major maintenance in FY27; other projects will begin partial budgeting for maintenance from FY27 onwards. - Capital Infra Trust plans acquisitions of 4 to 7 assets in FY27, including 4-5 ROFO assets from sponsors and 2-3 third-party HAM assets. - Future acquisitions will require additional equity and debt capital; fresh fundraises are planned depending on acquisition timelines. - The Trust targets a net debt-to-AUM ratio of 45%-47% in the medium term, considering enhanced leverage capacity up to 70% post-June 2026 for acquisitions. - Focus on accretive acquisitions to increase NAV and stable annuity inflows supports capital deployment strategy. - No specific strategic non-infrastructure investments mentioned; focus remains on HAM road assets and operational improvements.

- Equity Fundraising: - The Trust raised Rs. 1,250 crores via QIP in December for acquisition of 3 ROFO assets, fully utilized as of now. - Additional equity capital will be required for fresh acquisitions planned for next financial year (FY27). - Specific guidance on timing and quantum of future equity raises will be provided once binding term sheets for new acquisitions are executed. - Debt Fundraising: - Fresh borrowings of Rs. 1,100 crores were completed in January for ROFO asset acquisition at 6.85% PAPM floating rate. - Rs. 933 crores of debentures are planned to be refinanced by March end via a mix of debentures and rupee term loans at 6.85% PAPM. - The objective is to maintain debt leverage in the 45%-47% range medium term, with potential to increase up to 70% post-June 2026 after six distributions. - Future acquisitions may involve reassessment of debt levels within regulatory limits (below 49%).

- Capital Infra Trust currently has a strong acquisition pipeline spanning FY27 to FY29. - There are 14 HAM assets under development by the sponsor with Right of First Offer (ROFO), of which: - 7 assets will be ready in FY27. - The remaining 7 assets are expected by the second half of FY29. - 2 of these ROFO assets will be ready for acquisition by the end of FY26, with due diligence to begin soon. - The Trust is also actively evaluating third-party HAM asset acquisitions and is in early-stage discussions with multiple parties. - For the next 12 months, Capital Infra Trust plans to increase its Asset Under Management (AUM) by Rs. 9,000 to Rs. 10,000 crores from the current Rs. 6,733 crores. - The plan includes acquiring 4 to 7 new assets in the next financial year.