Hindustan Construction Company LtdQ1 FY26Construction

Hindustan Construction Company Ltd

Q1 FY26 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 2

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Revenue guidance

Category 2

→The company targets a growth of around 20% in turnover for the current year.
→Expected substantial revenue ramp-up from FY27 onwards, driven by increased order bookings.
→Order intake target for FY26 is ₹15,000 crore, aiming to grow order backlog to ₹26,000-27,000 crore by FY27.
→Healthy growth in top line and even better growth in bottom line expected starting FY27.
→Anticipate 14-15% EBITDA margins to be maintained long-term with stable operating cash flows (~₹700 crore).
→Sectors like nuclear, hydro, transport, buildings, and industrial (steel, copper, aluminium) show significant growth opportunities.
→Nuclear order book expected to increase from current low level (3-8%) due to scaling up programs and private/government developer traction.
→Execution efficiencies and deleveraging will boost profitability and margins going forward.
→The company is focused on disciplined risk management and profitable growth instead of volume-only increases.

Category 2

→Expect healthy growth from FY27 onwards in both top line (revenue) and bottom line (profits).
→PAT (Profit After Tax) growth and PAT margins anticipated to improve substantially with operational efficiencies and deleveraging.
→EBITDA margins to be maintained around 14-15% on average.
→Operating cash flows projected to be around ₹700 crore or more, though may be lumpy quarter to quarter.
→Further debt prepayment planned in FY27 leading to substantial EPS accretion.
→The company aims to become debt-free in near to medium term (around FY28), which will positively impact profitability.
→Business growth expected due to increase in order bookings targeting ₹15,000 crore in FY26 and a backlog of around ₹26,000-27,000 crore by FY27.
→Opportunities across sectors like nuclear, hydropower, metro, and industrial expected to drive growth.

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Yes

→The company has taken an enabling approval for a fresh fundraise of up to ₹800 crore.
→No immediate decision to raise funds; the need will be assessed based on capital requirements for growth and order opportunities (Page 10).
→If equity is raised, it is likely to be through a rights issue to benefit existing shareholders (Page 10).
→The possibility of a rights issue is not a done deal but serves as an enabling provision due to expected large orders, including potential BOT opportunities (Page 12).
→The company aims to avoid equity raises if possible, as equity is the most expensive capital (Page 12).
→On the debt side, the company has been actively deleveraging and aims to be debt-free in the short to medium term (Pages 8, 9).
→Refinancing options are being considered to reduce cost of debt and improve liquidity (Page 10).

Yes

→Current order backlog as of 31 March 2026 includes ₹26,000 crore of bids under evaluation.
→Additional bids of around ₹43,800 crore planned to be submitted in Q1 and Q2 FY27.
→The company's order book sectors include transport (maximum), followed by hydropower, water, nuclear, and buildings.
→Nuclear orders currently constitute about 3% of the order book but are expected to increase significantly in the next five years due to multiplying opportunities.
→Expected order book by FY27 is around ₹26,000-27,000 crore.
→Long-term target aims for 20-25% CAGR in order backlog and revenue growth.
→There is anticipation of scaling to ₹40,000-50,000 crore order book by FY28 in a favorable scenario.
→One significant L1 position is ₹840 crore related to a Kashmir project pending administrative clearance.

Yes

→The company is taking enabling approval for a fresh issue of up to ₹800 crore to support fast growth and capital needs, though the timing and mode (likely rights issue) are not yet finalized (Page 10-11).
→They aim to book ₹15,000 crore in orders in FY27, targeting an order book of ₹22,000-25,000 crore by FY27 end with a long-term CAGR of 20-25% in order backlog and revenue (Page 10).
→Planned capital investments are aligned with the infrastructure sector expansion in metro, hydropower, nuclear, and industrial sectors, with opportunities in projects worth tens of thousands of crores (Pages 2-4).
→Strategic focus on deleveraging the company completely to free up room for growth capital; exploring refinancing to reduce finance cost and improve liquidity (Pages 9-11).
→Investment in subsidiary HCC Infrastructure (~₹1,150 crore) is maintained due to receivables recovery expectations and business prospects (Page 5).

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