BHARATINVIT — earnings call

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Prepared remarks

Unattributed

Transcript of Q1FY26 Earnings Conference Call of

represented by its Investment Manager

GR Highways Investment Manager Private Limited

MANAGEMENT: MR.

AMIT KUMAR SINGH, CHIEF EXECUTIVE OFFICER

HARSHAEL SAWANT, CHIEF FINANCIAL OFFICER

Moderator

Ladies and gentlemen, good day, and welcome to the Indus Infra Trust Q1 FY '26 Earnings

Conference Call.

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 call, please signal an operator by pressing star then

zero on your touchtone phone.

Please note that this conference is being recorded.

I will now hand the conference over to Mr.

Amit Kumar Singh, the Chief Executive Officer

of the Investment Manager.

Thank you, and over to you, Mr.

Amit Kumar Singh

Thanks, Vishakha, and good afternoon, everyone.

So on behalf of Indus Infra Trust and GR

Highways Investment Manager Private Limited, a very warm welcome to each one of you

on our first quarterly earnings call for FY '26.

Let me begin by recognizing the government's unwavering push towards the infrastructure

development with the national highways network now crossing 1.46 lakhs kilometers.

India now proudly holds the distinction of having the second largest road network in the

Under the Honorable Prime Minister's Viksit Bharat at 2047 vision, the Ministry of

Road Transport and Highways is not just laying roads, they're actually laying down the

building blocks for long-term economic transformation for the country.

The pace of highways construction continues to remain strong.

Over 60,000 kilometers

have been added in the past decade alone.

Just in the last few weeks, we have seen

several key national highway projects being inaugurated, all launched across Bihar,

Rajasthan, Telangana, Jharkhand and Maharashtra.

These developments not only boost

connectivity, but also open up significant ROFO and non-ROFO opportunities for InvITs

Let me now walk you through some of the key updates for the quarter.

As of June 30, 2025,

Indus Infra Trust continues to own a diversified portfolio of 9 HAM Road assets.

Operational performance remains strong, and the portfolio has an average residual life of

Annuity receipts have been in line with expectations, and our collection

cycle remains healthy and timely.

We have remained disciplined in managing our capital structure.

Our leverage stands at

28.97%, giving us ample room to pursue future acquisitions.

The Board met yesterday and

approved a distribution per unit DPU of INR3.25 for Q1 FY '26 broken down into INR2.78,

which is INR2.78 as interest, INR0.04 as dividend and INR0.43 as capital repayment.

So with this, our cumulative DPU since listing now stands at INR17.45 per unit,

underscoring our consistent focus on delivering stable and predictable returns to our

On the acquisition side, we have kicked off due diligence on our new ROFO

Indus Infra Trust

HAM assets offered by GR targeting to complete it by -- within this quarter.

actively evaluating third-party assets staying true to our quality-first strategy.

Looking ahead, we remain committed to playing a meaningful role in India's infrastructure

growth, backed by a robust balance sheet, a well-defined pipeline of ROFO and third-party

assets and the momentum of our recent strategic rebranding, we are in a strong position

to capture emerging opportunities and drive long-term value for all our stakeholders.

Thank you once again for joining us today.

With that, now I'll hand over to Harshael, who will walk you through the detailed financials.

And after his presentation, we'll be happy to take your questions.

Over to you, Harshael.

Harshael Sawant:

Coming to Q1 FY '26 performance on a stand-alone basis.

income on the loan extended by the Trust to the SPVs was INR185 crores as against

INR175-odd crores in Q4 FY '25.

The increase in the interest income was on account of the

debt on lend to Galgalia Bahadurganj project, which we had acquired in Q4 FY '25.

The dividend received during the quarter from the SPVs was INR9.09 crores, which was

utilized for distribution during the last quarter.

EBITDA adjusted for the impairment for the

quarter was INR192.95 crores.

The impairment, which is getting reflected in the stand-

alone financials is on account of difference in the fair value and the book value of

The reduction in fair value is primarily on account of cash, which is upstreamed by the SPV

for distribution and on account of reduction in the bank rate during the last quarter.

total external borrowing at the Trust level stands at INR2,114-odd crores and the interest

during the quarter on the same was INR37.5 crores.

During the month of May, we had availed additional borrowing of INR382-odd crores to

refinance the external debt of Galgalia Bahadurganj project.

The tax outflow, which is

getting represented in stand-alone financials is only on the other income, which is earned

Coming to the consolidated financials.

During the quarter, the total income was

INR204.48 crores, consisting of INR186 crores from revenue from operations and other

income of around INR18-odd crores.

The revenue from operation includes finance income

of INR155 crores as against INR186 crores in last quarter.

The reduction in the finance

income is primarily on account of reduction in the bank rate, resulting a lower financial

income in the SPVs.

The revenue from contracts during the quarter was INR31.33 crores as against INR64.58

crores in Q4 FY '25.

Excluding the prior period GST claim and change of scope amount,

which is included in the amounts mentioned earlier, the O&M expense for the period was

INR24 crores as against INR19 crores in Q4 FY '25.

Coming to the distribution.

In relation to the NDCF computation, which is shown on Slide

9 of the presentation, the SPV level cash flows, cash flows from operations at SPV,

including the finance income was INR291.8 crores.

Considering the debt obligations at the SPV level and amount retained at the SPV level to

meet the current liabilities, the net distributable cash flow worked out to INR221.59

Out of this, the total distribution, which was upstreamed to the Trust was

INR215.27 crores.

And the form of distribution was INR184-odd crores in the form of

interest, repayment of debt of INR28.55 crores and dividend amount of INR2.74 crores.

Post adjusting for Trust level expenses, finance costs, debt stock reserve requirement, the

NDCF for the quarter worked out to INR147.1 crores, out of which approximately INR144

crores is proposed to be distributed, resulting in a distribution of INR3.25 per unit.

form of distribution was earlier mentioned by Amit and the amount will be distributed

within 5 working days from the record date, which is August 4, 2025.

Thank you, and we are open to questions now.

Questions and answers

Moderator

Thank you very much.

We will now begin the question and answer session.

question is from the line of Mr.

Siddesh Chaudhari from Maximal Capital.

Siddesh Chaudhari

Sir, what is the AUM growth targets for FY '26, '27 and '28 from the ROFO assets?

Amit Kumar Singh

So I think with the acquisition what we are targeting is here from ROFO assets...

Moderator

Sorry to disturb you, sir.

Siddesh, I will request you to keep yourself on mute because

I can hear echo from your line, sir.

Amit Kumar Singh

So if you see the acquisition what we are targeting this year from GR ROFO assets and non-

ROFO, I think we should add -- for at least FY '26, we should add almost INR3,500 crores

to INR4,000 crores of the EV this year, which is '26.

And '27, if I tell you, we should again

add, say, to the tune of maybe INR5,000-odd crores in '27.

And if you see '28, again, it is going to be almost INR5,000 crores, INR5,500 crores.

the -- I can tell you the pipeline work and see from the ROFO and the non-ROFO assets

which we are evaluating now.

And we are in the advanced stage of, say, either signing into

a definitive agreements or signing into a nonbinding something.

Indus Infra Trust

Of course, this will get pushed up further, if we suppose people to close more non-GR

So I think INR3,500 crores to INR4,000 crores this year and maybe you can say

INR5,000 crores, INR5,500 crores over the next 2 years, which is '27 and '28, yes.

Siddesh Chaudhari

And secondly, on the distribution, so this quarter, we have distributed INR3.25.

reasonable to expect that this year's full year distribution can be INR13 or more for FY '26?

Amit Kumar Singh

Look, if you put INR3.25 into 4s, that number comes.

And guidance, what we had given

was INR12.5 on the first call.

I think we'll stick to the guidance.

Whatever we distribute

definitely will be more than the guidance once again.

And that can be more than INR12.5

Siddesh Chaudhari

And I think this quarter, we had more share of the capital return.

So what could be

the split going forward for interest and capital returns assuming dividend is small for the

Amit Kumar Singh

So I can tell you over the next 3 to 4 years, at least I can tell you maybe 4, 5 years, dividend

is going to be minimal now.

Primarily it's going to be a mix of interest and repayment of --

basically repayment of capital.

So if I tell you this year is going to be most likely, say, 41%

interest plus 8% to 9% dividend, that's the repayment of capital.

So 50% interest and

dividend for this year.

Next year, this is going to be, I think, two-third interest and dividend and one-third of

capital increment.

I think same for the year after next.

So this is the basis the assets we

Once I take newer assets, this will change.

Siddesh Chaudhari

So 50-50 for this year and two-third, one-third for the next 2 years?

Amit Kumar Singh

Based on the 9% what we have now.

Once we take more assets, again that

contributes more towards dividend initially and it may change to a certain extent.

Moderator

The next question is from the line of Anant Mundra from Mytemple Capital.

Anant Mundra

Sir, what would be the current IRR after the recent rate cut?

Amit Kumar Singh

Recent rate cut?

Recent rate cut, I think IRR -- ballpark, I'm telling you because we need to relook at

because we are taking one more assets now.

So we have to combine that model -- as in

the include that asset also.

But I think ballpark, if I tell you, it should be around 10%-odd.

A tad above 10%, but yes.

Anant Mundra

But why would it reduce so sharply?

Because I think we were 12.12% and then there

was a 75 bps rate cut after that…

Amit Kumar Singh

10%, what I'm saying this is on the current market price, right?

Because the market value...

Anant Mundra

So I was just talking with reference to the 12.12% that you had mentioned.

that would drop to what level?

Amit Kumar Singh

This 12.12%, I think it should be in the range of what we had seen last was around 11.9%.

Anant Mundra

It should be around 11.9% now?

Amit Kumar Singh

So ballpark 12%, again.

Anant Mundra

And then 2 more assets we are going to acquire in this quarter from GR?

Amit Kumar Singh

One more asset, sir.

And 3 more assets will be, I think, most likely Q4.

Because NHAI and

lenders approval and everything we have to start.

So I think that should take us to Q4.

Anant Mundra

So the -- this INR3,500 crores, INR4,000 crores EV that we are planning to add is only

from the GR assets?

Amit Kumar Singh

No, this is GR and non-GR both.

Because sir, what happens, whatever we distribute, right,

that also goes back, right?

So I'm taking you INR7,000 crores to -- we'll touch around

INR10,500 crores to INR11,000 crores post our distribution.

Anant Mundra

And next year, INR5,000 crores and then the year after that, you mentioned another

INR5,000 crores, that is only from GR, is what you're factoring?

Amit Kumar Singh

Year after that almost INR6,000 crores and year after that around INR5,000 crores,

INR5,500 crores that is from GR and what some -- the ROFO is what we are looking at.

I think that number, again, may change because we are looking at some non-GR assets as

well, which may get added.

So this number also may change.

But the more clarity will

emerge, say, by end of this year.

Anant Mundra

And so then what would be our plan for fundraising?

And because I think maximum

leverage that we'll take is about 55%.

That's what you had mentioned in the last call.

then what would our plan for fundraising?

I think we'll need funds this year itself.

understanding, correct?

Amit Kumar Singh

So if you see on the gross basis, our leverage is around 28%, 29%, right?

what we have said that we'll go up to around, say, 60%, 62%, 63% of the overall leverage

we can because now with this quarter of distribution, my 6 quarterly distribution would be

Indus Infra Trust

So actually, with the unitholders' approval, I can take my leverage up to whatever the

permissible limits.

But 70%, of course, nobody wants to go, nobody wants to, as that's so

around 60%, 62%-odd.

So I have a decent room to acquire, say, at least the next 3, 4, 5

assets, I can acquire through basically my leverage only.

So I think plan for the fundraising,

if until I get some good opportunity where the money may be required.

Otherwise, it's going

to be either Q4 or maybe sometime next year only.

Anant Mundra

And what would our current cost of debt be after the repo?

Amit Kumar Singh

Current cost of debt is currently ours is 7.1%, and this is linked to repo.

Anant Mundra

Sorry, I missed the number.

And sir, final question, maintenance contracts, what is our lock-in for the

maintenance contracts with GR?

Amit Kumar Singh

Maintenance contracts, sir, it has -- when we had signed, this is 7 years and 7 plus 7.

the first 7 years, then we have a right to review both of us and then we can further extend

Anant Mundra

But for 7 years, there's a full lock-in?

Both sides, okay.

Moderator

The next question is from the line of Siddesh Chaudhari from Maximal Capital.

Siddesh Chaudhari

Sir, just one more question on the industry per se.

Moderator

Sorry to interrupt you, Mr.

Once you're done speaking keep yourself on mute

because echo coming from your line, okay?

Now you can speak.

Siddesh Chaudhari

Are you able to hear me?

Moderator

Yes, you are audible sir.

But once you are done speaking, keep yourself on mute, let the

management speak and then you can unmute yourself, okay?

Siddesh Chaudhari

So this was more like a relevant question to the industry.

So I think there are 2 things

that we have seen.

One is the slow ordering in general, so people are not able to make

much over asset to work on [inaudible 0:19:39].

And it can be because of that they did not

want to sort of recycle the balance sheet because, there's not much of an honor which is

coming through.

So how do you see this situation…

Moderator

Siddesh, sorry to interrupt you.

Your voice is coming from distant now.

be a little louder?

Siddesh Chaudhari

Yes, yes, so the question about that, how do you see this sort of a situation evolving and

any impact that it can have on our acquisition plans?

Amit Kumar Singh

So I think if you see -- yes, the last -- I think the couple of years, including last year, have

seen some moderation in HAM awards.

And even the awards which were done actually,

there's a very intensive bidding, and it actually went to a lot of, you can say, new emerging

players as well.

But I think NHAI is currently now coming with a couple of guidelines where there will be

like very recently, they came up where they said that, okay, if you suppose you bid for

INR1,000 is your bid -- is your order book and you bid for some new projects.

that is -- will get adjusted against your overall basically bid size so from your net worth.

So now what's going to happen is that I think these kind of regulations and of course,

authorities may come up with other kind of things also.

So this may actually will get some

rationalization back in terms of your bidding.

And then you can see that basically, you'll

start seeing more awards coming from authority.

Second thing is what I understand is that also there's one reason NHAI and more, they are

not awarding much of the projects is because new regulation, they say that minimum 80%

to 90% of the land till the time is not there, they don't even award now.

So with that one of

them, of course, the land acquisition eventually, which actually used to happen later --

earlier -- after the award.

Now they've actually sort of basically brought it back, and they have front-ended it.

because of that, what's happening is that, of course, the awards are taking a little more

But I think we do expect that Q3 and Q4 of this year, primarily Q4, maybe Q3, we

are expected to see some awards from NHAI.

However, NHAI and MoRTH some awards

are coming, but that is not of the bigger size.

So it's going to, I would say, maybe

competitively not so big players.

Siddesh Chaudhari

And do you feel…

Amit Kumar Singh

Sorry, Siddesh.

I can't - your voice was feeble.

Siddesh Chaudhari

No, I was asking that since, there has been a lull period.

So do you see that impacting

their propensity to offload the assets to other indexes because already many of the

developers are very cash rich?

Right now, balance sheets are big.

So they may not have to

sell down to the indexes?

Amit Kumar Singh

Actually, if you see what's the trend, what we are seeing is -- if you can just put yourself on

mute because the voice is echoing.

So if you see, because of the trend, what we are

seeing that, of course, as you see, if you see the last 2 years, the awards has been and the

basic primary analysis of that threw up a trend that, the larger projects or maybe the

majority of the projects not going to the listed ones, which are the bigger players.

So what bigger players, you can see across the place, you can see basically a theme of

diversification.

And they are getting into the different Infra segments.

So whether it could

be water, it could be roadways, it could be transmission, it could be railways, it can be

building and factory.

So because of that, what happens in that newer segments, unlike roads where they are

very much attuned to the working style and how to maintain capital, there, they need the

So that is not the case.

And what we can see it, the trend is that, even the bigger

guys who haven't got they are actually evaluating or deliberating recycling of the capital

because that capital is required in turn to put in the newer segments.

And of course, the newer segments may not throw up the same kind of margins, which

they've been enjoying in roads because, of course, there is a cost of learning as well.

don't see that even the not -- no new projects being awarded, will sort of hamper, basically

monetization of roads from these guys because their balance sheet is strong.

Balance sheet is strong, but I think opportunities are being explored and are being

deliberated across the developers.

Moderator

The next question is from the line of Deep from Bandhan AMC.

Congratulations, sir, on a stable and more than expected guided DPU.

So just one thing, I

mean, considering the draft guidelines that we see that in toll assets now kind of every kind

of cash flow will be linked to traffic, right?

I mean if there is -- I mean, if the traffic is low,

then NHAI will reimburse the company.

And if traffic is high, then I mean, the company will pay back to NHAI.

So how will the

industry shape up in case of toll assets?

And any plans to diversify to toll at least for some

percentage of AUM?

Or I mean, we'll stick to HAM only.

If you can just throw some light on

Amit Kumar Singh

So I think -- thanks, Deep.

Actually, there are 2 different things.

If you see, of course, what

we had recently got to know that there's one more new BOT framework, which MoRTH is

going to come out very soon.

But I can tell you about the recent one where what's happening is that if -- suppose your

traffic get -- or you get higher traffic than the estimated traffic of a given year.

happening is -- and I'm talking about the current agreement, current -- basically BOT

agreement, where model concession agreement I'm talking about.

There, what's happening is that your concession gets reduced, okay?

And suppose your -

- to the extent of 20% of your overall concession period.

And if suppose you don't get the

higher traffic or the your estimated traffic in a given year, of course, there are re-

competition happens and then it gets -- you get an extension, which is again to the

maximum of 20%, okay?

So this is what the formula given now.

I think the one -- what you asked is that this INR3,000 and basically INR200 rides.

different thing because everybody is now calculating that, okay, depending on that, what

should be the formula and they will go to authority and ask for, say, basically this thing

under change in law and on what period is -- basically what should be the periodicity for

that payment to happen from authority.

Everything is being worked upon.

So nothing has been finalized or this thing because there

are a lot of guys who have got impacted.

They were -- because of a lot of car traffic.

just doing that.

But I think your question was more first towards the answer given the first

part, which is model concession agreement where there's a provision of extension or

reduction of your concession on account of a traffic, which is being achieved or not

achieved on a given date, and that is against the estimated traffic.

Hope I'm clear what you

Yes, yes, definitely.

Sir, I mean do you have any plans to diversify into that segment or we

are planning to stick to HAM only?

I mean, because now eventually, there also cash flow

certainty will rise, not definitely like HAM, but to some extent, if you can throw some light.

I think also we are going to get some norms for 90% of the right of way thing.

on that, but if you can just throw some light?

So that is very clear that under BOT, if you have right of way, but until unless that

concession or that project is not being put to use for the economic purposes, of course,

there won't be anything.

So when you get a BOT, of course, you want to be very sure of the

right of way because once you construct, of course, you can also -- you also start

collecting the tool.

Indus Infra Trust

Coming back to our strategy, I think we have been very clear since day 1 when we went to

the market to our investors that we want to maintain a strategy where this InvIT -- the

underlying assets of this InvIT, not necessarily the HAM, but yes, if you take, say, a BOT

asset or a TOT, that can be subject to a maximum of X percentage of my overall AUM, so

that it doesn't impact the basic tenant or basic fabric of my InvIT.

Because I want to keep giving the steady and consistent returns or DPU to my unitholders.

So if whatever I take, it should be -- there should be a proper track record.

So I don't want

to take a -- don't want to take, say, under construction BOT.

Even if I take a BOT, that

should be if I'm buying from somebody or even from, let's say, a commercial ROFO from

GR also, that should have a 2, 3 years, a couple of years of the traffic history so that I

exactly know that even after doing a sensitivity, what's the basic threshold level I can come

And that should not again impact my distribution or DPU -- distribution capability, what

are the guidance I would have given at the start of that year.

So of course, that we model

And after evaluating that, subject to a certain size of my AUM, we'll have to start

looking at that because see, at the end of the day, your Trust is also part of the ecosystem,

and the ecosystem will only have all the new toll assets or TOT assets coming.

we may also have to start looking at that.

But of course, that will be done with a proper discussion and deliberation with our

unitholders also because that has been our basically idea since the time we came through

this IPO that whatever we do, will then bounce it off to our unitholders or maybe have a

proper discussion, I'll come to you for your approval so that there's -- what we are doing

as a strategy, as a proper thought-out strategy is being -- should not be disturbing the --

my distribution history or my distribution guidance.

Sir, just a last question, a follow-up on that.

So I think we have considerable

amount of acquisitions due at least for…

Amit Kumar Singh

Sorry, just come again...

Can you hear me now?

Yes, you are audible.

So only one thing, and since we have considerable amount of acquisition already due for

'26, '27 proposition on GR.

I the proposition of bought or -- say, coming, when we -- I mean,

are we going to take it up in near future?

Or it is a kind of later estimate?

over the course of time?

See, our timeline has been very clear, and it's not that anything which I can do as per my

This is a proper timeline which has been actually defined.

So if you see in the

concession agreement, my -- okay, first, I'll come to my InvIT, my InvIT allows to me take

an asset which is inevitable only if it should have a revenue generation track record of 1

So if I take an example of a HAM asset, I can only take an asset of say from anybody,

whether it's a GR under ROFO and non-GR asset, then they say 2 annuities or 1 year would

have been passed by.

Only thing is that -- but NHAI actually can give you the change of

control even after completion of -- even after, say, payment of first annuity, which is 6

So -- but generally then it takes some timelines also which you take in terms of

consummating the transaction.

So generally, when I take asset, actually with a practically 1 year passes.

In terms of -- so

all the assets, what I said from GR, what I'm going to take under ROFO, whether it's a '26

or it's a '27, it will also follow that timeline.

In terms of BOT acquisition timeline, of course,

we keep evaluating, we keep the BOT assets.

But there's no timeline which is like because any BOT asset which I started evaluating now

also easily the -- it's coming on board will easily take you through at least past '26.

will easily enter '27.

But as of now, I don't have any -- of course, as a process, you keep

evaluating, but there's nothing -- no BOT assets where I can give you any timeline.

everything is under consideration, under evaluation.

Moderator

As there are no further questions, I would now like to hand the conference over

Amit Kumar Singh for closing remarks.

Amit Kumar Singh

And I would again want to thank all the unitholders who joined me in this call.

wish all of you a good day, and we'll keep you posted on any developments which will

happen, a substantial development, which will happen on our side.

Moderator

Ladies and gentlemen, on behalf of Indus Infra Trust, that concludes this

Thank you for joining us, and you may now disconnect your lines.