Ircon International Ltd Q1 FY26 Earnings Analysis

- FY’25 revenue was Rs.11,131 crore with PAT Rs.728 crore; order book stood at Rs.20,347 crore. - FY’26 turnover expected to remain similar to FY’25 due to steady order book and execution timelines. - Order inflows for FY’25 were Rs.2,600 crore; Rs.1,150 crore already received in FY’26 till May. - Orders from new verticals like Kavach, signaling diagnostic, hydro power indicate diversification. - Margins expected to slightly decline by 0.5%-1% in FY’26 due to competition and some loss-making projects. - Efforts to grow order book via aggressive bidding, JV tie-ups, and entry into new verticals like Kavach and signaling. - Overseas order pursuits ongoing in Algeria, Myanmar, Sri Lanka, Bangladesh, and Nepal. - Medium-term growth expected once order additions surpass Rs.20,000 crore mark to break away from degrowth phase. - Monetization of strategic assets planned to improve financial flexibility. - Overall, growth outlook is cautious for FY’26 with potential for stronger growth post FY’27-28.

- FY’26 revenues expected to remain similar to FY’25, with turnover range maintained due to order book and execution timelines. - Margins anticipated to slightly decline by about 0.5% to 1% due to intense competition and lower bidding rates. - Core EBITDA margins forecasted in the range of 5% to 5.25%, excluding one-time losses. - Growth beyond FY’26 depends on securing higher order inflows above Rs.20,000 crores to shift from de-growth to growth phase by FY’27-28. - New verticals such as Kavach (train protection system), signaling diagnostics, hydro power, and overseas projects are expected to contribute to future growth. - Efforts on order inflows focus on quality bids, joint ventures, and entering new sectors to improve margins and order book. - Monetization of strategic assets is planned to improve financial strength. - Earnings per share in FY’25 was Rs.7.73; future EPS is expected to reflect margin pressures but can improve with order book growth.

- The company has made investments of about Rs.1,500 crores in road projects, with Rs.400-500 crores still to be invested. - In coal connectivity, investments of around Rs.1,000 crores have been made, with another Rs.500 crores pending. - Renewable energy investments are mostly complete, with Rs.30-50 crores remaining to be invested in the current year. - Overall, around Rs.2,300 crores have been invested across all SPVs, with about Rs.1,000 crores more planned, including approximately Rs.500 crores in the current financial year. - The company aims to monetize operational PPP projects quickly once projects are completed, in coordination with Railways and DIPAM. - For mining projects owned as minority stakes, monetization discussions will be held with coal companies. - There is a focus on bidding aggressively in new verticals, including Kavach, signaling diagnostics, hydro power, and metro projects.

- No explicit mention of any current or future fundraising through debt or equity was made during the call. - The focus appears to be on order inflows, project execution, and monetizing operational assets rather than raising fresh capital. - Management highlighted ongoing investments in roads, coal connectivity, and renewable sectors with internal funds. - Monetization of completed PPP projects and strategic assets is planned to generate funds. - No statements suggest immediate plans for external debt or equity fundraising. - The company emphasized bidding aggressively and expanding into new verticals to grow business organically.

- Order book as of March 31, 2025: Approximately Rs. 20,347 - 20,500 crore. - Order inflows during FY’25: Rs. 2,600 crore. - Order inflows for FY’26 till May 22, 2025: Rs. 1,150 crore. - Recent significant order: Kavach project (South Western Railway) worth Rs. 253 crore. - Additional Kavach tenders bid and under evaluation. - Orders include a mix of domestic (around 90%) and international projects. - Order book dominated by EPC projects, with gradual entry into new verticals like Kavach, signaling diagnostics, hydro power, and roads. - Order book includes competitive and nomination basis contracts. - Current order book sustains expected turnover for FY’26; company focusing on increasing order inflows to transition from de-growth to growth in coming years.