Capacit’e Infraprojects Q1 FY26 Results: Weak Quarter, Confident of Achieving FY26 Guidance
Guidance of 20% CAGR for FY25-28. Despite a weak Q1 a strong order book and attractive valuations create a compelling case for upside as execution accelerates
1. Construction Company
capacite.in | NSE : CAPACITE
2. FY22-25: PAT CAGR of 62% & Revenue CAGR of 21%
2.1 What Changed Between FY22–25
Shift to High-Margin Public EPC: Benefits: price escalation, assured funding, smoother billing
Execution Focus & Cost Leverage: Fewer, larger projects from FY23.
Higher per-site revenue, flat employee cost, stable EBITDA margin
Working Capital Efficiency: NWC cycle reduced by ~37 days.
Driven by: faster billing (MHADA/CIDCO), BG-backed retention release, better private client selection.
Pure Building Focus: No roads/rail — only residential, healthcare, & commercial
Outcome: entry barriers, client stickiness (Lodha, MHADA), and higher margins vs infra peers.
3. FY25: PAT up 70% & Revenue up 22% YoY
Revenue growth driven by robust execution and new order inflows.
EBITDA margin dipped due to:
Conservative accounting
Higher depreciation from capex in site establishments
4. Weak Q1-26: PAT down 12% & Revenue up 4% YoY
Revenue loss of ~₹75 Cr due to early monsoon & temporary labor migration.
Execution to accelerate from Q2/Q3 – monsoon & Eid impact is temporary; large projects (CIDCO, MHADA, NBCC, Signature Global) will drive growth.
Management confident of sustaining margins at upper end of 16.5–17.5% for FY26, despite cost pressures
Q1-26 EBITDA margin at 18.6% is above guidance;
Q1 FY26 was soft on revenue growth due to external factors, but underlying execution efficiency and margin performance remain strong. With a robust order book and improving collections, the company looks on track to deliver its FY26 guidance, with stronger performance expected in H2.
5. Business Metrics: Weak — Improving Return Ratios
Return Ratios following the trend of margin expansion
6. Outlook: 20% revenue CAGR for FY25-28
Confident of 20% growth and margins at upper end of guidance band
6.1 Guidance & Outlook for FY26 and Beyond
FY26 Guidance — Capacit’e Infraprojects
Revenue Growth: Targeting 20% YoY growth,
EBITDA Margin: Maintain in the range of 16.5–17.5%
Order Inflow: So we have already given a target for the current full year, which is about INR4,000 crores to INR4,500 crores.
Vision 2028 – Capacit’e Infraprojects
Target ₹4,000+ Cr revenue by FY28 with 20%+ CAGR driven by EPC project execution.
Maintain 16.5%–17.5% EBITDA margins, including other income, through operational efficiency.
6.2 Q1 FY26 Performance vs FY26 Guidance
Revenue:
Q1 revenue at was below run-rate for ~₹2,900 Cr FY26E.
Guidance maintained — strong catch-up expected from Q2, with sharp acceleration in H2 FY26 .
EBITDA & Margins:
EBITDA margin 18.6%, above guidance band (16.5–17.5%).
Management confident of sustaining upper end of guidance for full-year.
PAT:
PAT slightly below FY26E run-rate.
Deferred profit recognition from NBCC and Signature Global to start flowing from Q2 onwards, supporting growth.
Cash Flow & Debt:
Collections at ₹543 Cr vs revenue of ₹599 Cr — healthy 91% realization in Q1.
Management reiterated positive cash flow generation for FY26 with ₹65 Cr asset monetization planned.
Q1 FY26 was soft on topline but strong on margins and collections.
Revenue miss is seasonal/temporary; execution to normalize from Q2 and accelerate in H2.
Margins, debt, and collections are trending better than guidance, lending comfort.
7.2 Opportunity at Current Valuation
Strong Growth Visibility: ₹11,254 Cr order book (~4.8× FY25 revenue) ensures 3+ years of revenue visibility, with CIDCO, MHADA, NBCC, and Signature Global projects driving execution momentum from H2 FY26.
Margin Comfort: Management expects to sustain margins at the upper end, supported by selective bidding and operational efficiency.
Improving Cash Flows: Collections at 91% of Q1 revenue show discipline in working capital management. Management expects FY26 to be cash flow positive, a structural improvement vs earlier years.
Valuation Comfort: Trading at ~11× FY26E P/E and 5.8× EV/EBITDA, valuations are reasonable for a 20% CAGR story. By FY28, multiples compress further to ~8× P/E and 4.2× EV/EBITDA, opening room for re-rating.
Catalysts: Execution pickup in H2, order inflows above guidance (₹4,000–4,500 Cr target), debt reduction, and consistent delivery can drive investor confidence and valuations higher.
Opportunity Rating: High — Strong order book + attractive valuations create a compelling case for upside as execution accelerates. However, one most be ready to go through a phase of weakness in the stock till the promised momentum is seen in H2 FY26
7.3 Risk at Current Valuation
Execution Risk: Heavy reliance on large public projects (CIDCO, MHADA, NBCC). Any delay in approvals, site readiness, or execution pace can derail the 20% growth guidance.
Seasonality & External Factors: Monsoon, elections, and regulatory stoppages (e.g., NGT in NCR winters) could cause quarterly volatility in revenue recognition.
Labor Shortages: Structural shortage of skilled manpower due to overseas demand; despite tech-enabled tracking, availability could remain a growth bottleneck.
Working Capital Intensity: Government/EPC projects are back-ended on cash flows. Elevated contract assets could strain operating cash flows if collections falter.
Profit Recognition Lags: Deferred recognition from NBCC, Signature Global, and JVs may create earnings lumpiness and mismatch between execution and reported profits.
Margin Sensitivity: Input cost inflation (steel, cement) or unfavorable contract terms could squeeze EBITDA margins below guidance.
Risk Rating: Medium — Structural strengths are intact, but execution, labor remain key watchpoints that could cap near-term rerating.
Previous Coverage of CAPACITE
Don’t like what you are reading? Will do better.` Let us know at hi@moneymuscle.in
Don’t miss reading our Disclaimer