Tara Chand InfraLogistic Solutions Ltd (TARACHAND) Q2FY27 Concall Transcript - Sep-2026 Qtr
Rutuja: Ladies and gentlemen, good day and welcome to the Q2 and H1 FY '27 earnings conference call for Tara Chand InfraLogistic Solutions Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. I now hand the conference over to Mr. Manveer from Stellar Investor Relations. Thank you, and over to you, sir.
Manveer (Stellar Investor Relations): Thank you, Rutuja. Good afternoon, everyone, and thank you for joining us today to discuss Q2 and H1 FY '27 business performance. We have with us the senior management team represented by Mr. Himanshu Aggarwal, Whole Time Director and Chief Financial Officer. Before we proceed with this call, I would like to mention that some of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. The company also undertakes no obligation to update any forward-looking statements to reflect developments that occur after this statement is made. Documents relating to the company's financial performance, including the investor presentation, have been uploaded to the stock exchange and the company's website. I now invite Mr. Himanshu Aggarwal to share his initial remark remarks on the company's performance, and then we will open the floor for Q&A. Thank you, and over to you, sir.
Himanshu Aggarwal (Tara Chand InfraLogistic Solutions Ltd): Thank you for the introduction, Manveer. Good afternoon, ladies and gentlemen. I, Himanshu Aggarwal, the Whole-Time Director and CFO of Tara Chand InfraLogistic Solutions Limited, welcome you and thank you for joining the earnings call for the quarter and half year ended 30th September 2026. I hope you have had the opportunity to go through the investor presentation that was posted on the NSE website. Let me begin with Q2 FY '27, which marks as a clear and measurable recovery from a difficult first quarter. Revenue from operations grew 27% year-on-year to 83.11 crores, while profit after tax grew 21% year-on-year to 9.05 crores, the highest quarterly profit the company has reported to date. And the EBITDA margin recovered by 400 basis points over Q1 to 34.7%. We have consistently said that given the seasonality of our business, with Q3 and Q4 historically contributing close to 60% of annual revenue, the year-on-year comparison is the right lens. However, this quarter, the sequential comparison also matters because it demonstrates that the disruption in Q1 was transient. The one-off factors that defined Q1 are behind us, and Q2 reflects our journey back towards the normal operating operating rhythm of the business. On the financials front for the quarter, total revenue grew 25% year-on-year to 84.03 crores, with revenue from operations at 83.11 crores, as highlighted above, and 23% above the Q1. EBITDA grew 11% year-on-year to 29.16 crores, while PAT margin was maintained at 11%, in line with the same quarter last year. And earnings per share also stood at 1.15 rupees per share against 0.95 a year ago. Cash PAT, which we continue to regard as an important earnings measure for a capital-incentive fleet business, it grew 8% to 23.3 crores. For the half year ended 30th September 2026, total revenue grew 18% year-on-year to 152.46 crores, with revenue from operations up 19% at 150.74 crores. EBITDA for the half year stood at 50.18 crores, marginally ahead of last year, and cash PAT at 40.9 crores. Profit after tax for the [inaudible] 9.4 crore last year for the same period. The entire shortfall, as I mentioned earlier, is attributable to the first quarter, and the half year EBITDA margin of 32.9% should also be read in that light.
Himanshu Aggarwal (Tara Chand InfraLogistic Solutions Ltd): with an EBITDA of 12%. Our lower EBITDA for specialized services is primarily attributed to higher costs on account of heavy monsoons that led to lower than desired output at the project site. As the newer That brings me to CapEx. The company invested 106.6 crores in equipment in H1 FY '27, ahead of the 80 to 100 crores that we had planned for the full year. This was a deliberate decision. We saw the opportunities in power and renewable energy sectors that were firm, backed by client commitments, and we chose to secure them. Nine machines were added in the half year including two 900-ton crawler cranes, two 800-ton crawler cranes, a 700 all-terrain crane, and a 500-ton crawler crane as well. The majority of this equipment is being commissioned during the third quarter, which is when it begins to contribute towards revenue. As of 30th September 2026, the fleet stood at 436 machines with a gross block of approximately 662 crores. Going forward, for the remainder of the financial year, the company will take a call on more CapEx depending on the upcoming opportunities and commitments from our client. Turning to the segments, equipment hiring and projects contributed 72% of revenue in the first half of this financial year, while warehousing and transportation was at 28%, where while steel and processing and distribution, which we have been consciously de-emphasized, was negligible at only 0.2%. The equipment hiring and project segment recorded a revenue of 59.55 crores in Q2, a growth of 57% year-on-year, and 108.3 crores 108.43 crores for the half year, which was up 56% year-on-year. The reported EBITDA for the segment is 44%, which includes specialized services, then the stand-alone equipment rental EBITDA margins stood at 55% for the quarter and 56% for the half year, supported by fleet utilization of 82%. The average gross monthly rental yield for H1 FY '27 was 2.83%. The sectoral mix of our rental revenue has shifted decisively towards the energy built out, which is power and renewable energy together accounting for 53% of equipment rental revenue in the first half, with cement, steel, petrochemicals, and other sectors making up the balance. This is precisely the deployment the high-tonnage CapEx was intended for. The warehousing and transportation segment returned to profitability in Q2 with revenue of 23.3 crores, a 24% improvement over Q1, and a segment EBITDA margin of 16% against a marginal loss in the first quarter. Steel volumes handled rose to 1.95 million metric tons in Q2. On a year-on-base year basis, the segment revenue is lower by 15%, which reflects the conclusion of our RINL, Vishakhapatnam contract, which was there in the base period last year, and the new contract of Dankuni stockyard in West Bengal still ramping up. The sequential recovery in both volumes and margin indicates that this segment has found its footing on the new base. As of October 2026, our order book stands at 163.7 crores, executable entirely within FY '27, with 74% from equipment hiring and projects and 26% from warehousing and transportation. Together with the revenue already booked in H1, this gives us the visibility to speak to fulfill to full year guidance with confidence. On the balance sheet, our net worth stood at 158 crores as of September 30th, 2026. The CapEx program has taken next deck to net debt to equity to the upper limit of one that we have set for ourselves, and we intend to operate within that ceiling. The average cost of borrowings stood at 6.26% on an annualized basis, while the net cash flow from operations for the half year was 30 30.3 crores, lower than last year principally on account of working capital. The receivable days were slightly above 100 days, while our target still remains to bring it down closer to 80 days. The major change has been the receivables from what we have noticed from the renewable energy sector are a little prolonged and we are trying to work out with our clients to ensure that the receivable cycles improve going forward. And we have good visibility on that as well. On guidance, we remain on course for the lower end of our 20 to 25% revenue growth target for FY '27, while on margins, we expect that the full-year EBITDA margin would be should be around 30
Himanshu Aggarwal (Tara Chand InfraLogistic Solutions Ltd): % below our earlier band of 37 to 35 on account of the first year first quarter challenges. And we expect that to exit the year closer to the band as the new fleet is fully deployed and specialized services also stabilized in Q3 and Q4. Our strategy remains anchored on three pillars: scale, specialize and sustain. Scale through calibrated fleet expansion aligned to confirm the fund. Specialized through a differentiated high tonnage fleet, the 900-ton metric crane the 900 metric ton cranes, the 68-m aerial aerial platforms and the also the self-owned rubber tyre gantries in our warehousing division. This creates entry barriers and commands premium yields. And sustain through disciplined leverage and a conscious decision to stay away from run-of-the-mill EPC work that does not meet our return thresholds. Every sector we serve power, renewables, cement, petrochemicals, steels and the others are is still building. The demand environment is robust, our visibility on the work ahead is the strongest it has been and the fleet to execute it is already on the ground. Q1 tested the business. Q2 has shown its resilience and we believe we are back on track. With that, I would now like to hand it back to the moderator for the Q&A session. Thank you.
Rutuja: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question, they please press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rohan Mehta from Fincom Ficcom Family Office. Please go ahead.
Rohan Mehta (Fincom Ficcom Family Office): Hi Himanshu. Am I audible?
Himanshu Aggarwal (Tara Chand InfraLogistic Solutions Ltd): Yes, you are. Please go ahead.
Rohan Mehta (Fincom Ficcom Family Office): Great. Thanks for taking my question. So a couple of questions. Firstly on you know Capex and compared to you know the growth guidance. So Capex for FY 27 was planned at 80-100 crores and H1 we have already spent close to 106 crores. And we have cited that this is because you know, the opportunities and power and renewables it was there to be taken. So I was expecting, you know, the growth guidance to be at the higher end. So could you just explain, if you're seeing opportunity, why would you why are you guiding for, you know, the lower end of the range that is 20%. And given that you know the demand is shaping up, are we being conservative at 20%?
Himanshu Aggarwal (Tara Chand InfraLogistic Solutions Ltd): Okay, so thank you for the questions, Mr Rohan. So see Capex is primarily the 106 crores is consumed by a chunk of the larger machines that I mentioned in the opening remarks. And those a good amount of those coming into play in Q3 and Q4 will help with the growth trajectory that we are focusing on. And as I mentioned, we could end up on the lower band of the growth target is also based on the fact that our revenues are a mix of equipment rentals, specialized services and warehousing and transportation. Q1 being a little slow, there has been a good movement in Q2 which is giving us positivity in H1 where we concluded H1 at 19% revenue growth compared to last year. And going by H2 being on the heavier side on revenue generation as well, which was there last year as well. So the base is also on the higher side and pushing on that 20% seems very likely with the growth opportunities that we already helped take up with the new capex that we have done. So that that is where we see currently that it should be where we would be able to exit the year.
Rohan Mehta (Fincom Ficcom Family Office): Got it. Got it. And in terms of your order book, so currently, it stands at about 163 crores and for about 20% growth H2 revenue approximately requires about 190 crores. So if I see on a net-on-net basis, you will require additional 30 odd crore odd crores of incremental orders. So, what sort of inquiries are you seeing right now and how confident are you that not only will these come in H2, but you will also be able to execute them
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