CAPITALINFRA — earnings call

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Prepared remarks

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“Capital Infra Trust

Q2 & H1 FY26 Earnings Conference Call”

November 18, 2025

MANAGEMENT: MR.

HARE KRISHNA – JOINT CHIEF EXECUTIVE

AMIT KUMAR – CHIEF FINANCIAL OFFICER

Moderator

Capital Infra Trust

November 18, 2025

Ladies and gentlemen, good day and welcome to Capital Infra Trust financial results

call for the Quarter and Half Year Ended September 30, 2025.

Capital Infra Trust will

be represented by Mr.

Hare Krishna, Joint CEO and Mr.

Amit Kumar, CFO.

conference call may contain forward-looking statements about the company which are

based on the beliefs, opinions, and expectations of the company as on date of this call.

These statements are not guarantees of future performance and involve risk and

uncertainties that are difficult to predict.

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.

Please note that this conference is being recorded.

I now hand over the conference to

Parikshit Kandpal from HDFC Securities.

Thank you and over to you, Mr.

Parikshit Kandpal:

Thank you, Renju.

So, without taking further time, I'd like to hand over the call to Mr.

Hare for his opening remarks.

Over to you, Mr.

Mr. Hare Krishna

Thanks, Parikshit.

Good afternoon, everyone, and thank you for joining us today.

delighted to share that we have made strong progress during the quarter, with reduced

leverage, a healthier balance sheet and we are on track to add three operational ROFO

assets within the next two months.

These steps position us for significant AUM growth,

as per our guidance during the IPO and reinforce our commitment to long-term value

I'd like to take you through the highlights of the quarter and three key strategic

initiatives that are underway currently.

First and foremost, we are focused on Strengthening the balance sheet.

successfully completed a preferential issue of INR 345 crores, meaningfully improving

our financial position.

This infusion has reduced our net debt from ~55% in June, 2025

to 45.6% as of November 14, 2025 restoring regulatory headroom and lowering

financial costs.

In total, we plan to repay INR 420 crores of existing borrowings by

December, underscoring our commitment to disciplined capital management and a

robust balance sheet.

Our financial fundamentals remain strong, supported by AAA/Stable rating from CRISIL

and CARE, with healthy annuity inflows, stable operating expenses, and competitive

borrowing costs.

Going forward, we intend to opt for repo-linked borrowings rather than

fixed-cost debentures, creating a natural hedge and further strengthening our debt

We will maintain a conservative approach in our future borrowings, with a clear

focus on keeping the leverage in the range of 45% to 47% in the short term.

Coming to second priority is the portfolio expansion through value-accretive

Our growth plan for FY26 is progressing well.

We are leveraging our

Capital Infra Trust

November 18, 2025

ROFO rights to acquire operational HAM assets namely Jodhpur Ring Road in

Rajasthan, Hasanpur-Bakhtiyarpur in Bihar, and Champa-Korba in Chhattisgarh.

These assets have a residual concession period of over 13 years, providing long-term

revenue visibility and predictable annuity inflows, making them highly accretive for

Collectively, these acquisitions will add 164 kms of operational highways,

broaden our geographic presence, and increase our AUM by over 60% from INR 4,282

crores to approximately INR 6,800 crores by FY26.

Furthermore, the asset acquisitions

are being done at a 9% discount to the enterprise value of INR 2,590 crores, ensuring

value accretion for investors.

Thirdly, we remain Committed to delivering consistent DPU distributions to our unit

Since inception, we have declared a cumulative DPU of INR 30.8 per unit,

reflecting our focus on unitholders' returns.

In the second quarter, our board has

approved distribution of INR 3.25 per unit, totaling INR 103.6 crores.

Going forward, our

priority is to ensure a sustainable and predictable distribution pattern.

addition of high-quality assets will further strengthen cash flows and support this

Coming to the performance and industry highlights, Q2 FY26 was marked by

operational stability across all the nine HAM assets that we have, with consistent riding

quality and maintenance standards.

Our annuity receipts stood at INR 523 crores, which was in line with our estimates.

maintained consistent distributions, aligned with our H1 FY26 guidance.

under management currently stands at INR 4,282 crores.

The broader industry dynamics also remains favorable, the road sector continues to

see strong momentum, with HAM continuing as the preferred model for project awards.

Government-initiatives and sustained budgetary allocation for the road sector further

strengthens the long-term outlook for the sector and creates a solid pipeline of

opportunities for InvITs like ours.

Looking ahead, our strategy remains firmly focused

on building a diversified portfolio of HAM assets, which are backed by predictable

inflation-linked annuity inflows.

And in turn, we will continue to operate these assets in an efficient manner and maintain

an optimum leverage.

Our clear roadmap targets an AUM of at least INR 10,000 crores

by FY27, through a pipeline of 17 ROFO assets from sponsor and acquisition of third-

party assets, thereby ensuring growth and consistent distribution.

I will now hand over

Amit for a brief on financial performance.

Mr. Amit Kumar

Good afternoon, everyone.

I will take you through the key financial

updates of the quarter and half year.

On a consolidated basis, our total income stood

at INR 393 crores, with a net profit of INR 5 crores in H1FY26, as compared to a total

income of INR 159 crores and loss of INR 37 crores in the last quarter.

Since the Trust

got listed in the month of January 2025, comparatives of H1 FY25 are not available.

Capital Infra Trust

November 18, 2025

While there was a net profit of INR 78 crores in Q2FY26, it got offset to an extent of INR

73 crores by net loss booked in Q1FY26, which was mainly due to modification loss on

financial assets, due to change in the bank rate by RBI to the tune of 75 bps since the

start of this current year.

Talking about the profit and loss on a standalone basis, the Trust recorded a total

income of INR 401 crores in H1FY26, consisting of dividend from subsidiaries of INR

194 crores in Trust income on loans extended by Trust to SPVs of INR 205 crores and

other treasury income of INR 1 crores.

EBITDA for the H1FY26 stood at INR 399 crores.

During the current half year, an impairment in the value of investment is booked

amounting to INR 311 crores.

The main reason for the same was interim distribution of

INR 307 crores to the unitholders in Jun'25, change in bank rates and approval pending

for GST claims due to change in law from NHAI.

For the period under consideration, the total distribution per unit for the H1FY26 works

out to INR 6.86 per unit, out of which INR 3.61 per unit was already paid for Q1FY26

and remaining INR 3.25 per unit is proposed to be paid now.

In the form of interest of

INR 2.52 per unit, taxable dividend of INR 0.71 per unit and other income of INR 0.02

Since distribution from the SPVs to Trust are tax-free in the hands of the Trust, the tax

outflow on standalone basis is only on the other income earned by the Trust.

summary, Capital Infra Trust is entering into a new phase of growth driven by balance

sheet deleveraging, value-accretive acquisitions and discipline capital allocation, all

aimed at delivering sustainable long-term value for our stakeholders.

Thank you for your attention.

All other information is available in our presentation.

can now open the floor for any questions you may have.

Questions and answers

Moderator

The first question comes from the line of Mr.

Pravesh Kumavat from

Kumavat Investments.

Please go ahead.

Mr. Pravesh Kumavat

The first question is with the current average cost of debt that we have is around 7.7%

or thereabouts.

I wanted to ask what is your planned approach to raising the future debt

and how do you intend to optimize the consolidated cost of borrowings over that?

Mr. Hare Krishna

As of now, the average cost of our current borrowings is around 7.6%.

earlier, we are pretty much working towards the acquisition of the 3 ROFO assets.

that, we would be taking additional debt as well, for which we are in discussions with

banks right now.

We anticipate getting a cost of around 7.1% to 7.2% for the additional

Even in the existing borrowings, we have one series which is due for renewal

We also want to refinance in the similar range of around 7.1% to 7.2%.

Mr. Pravesh Kumavat

Just connected to this, I wanted to ask if you can outline the debt strategy going forward.

What will be your debt to AUM ratio if we continue to raise the debt and how do we plan

to keep this leverage around 45% mark?

Capital Infra Trust

November 18, 2025

Mr. Hare Krishna

See our InvIT IPO happened in January, 2025 and till now we are making good

distributions, our leverage needs to be within 49% mark.

So, in the medium term, our

strategy would be to keep our leverage between 45% to 47%.

Once we have made six

distributions, then we will revisit this strategy and may look at increasing our overall

leverage to AUM in the range of 55% to 60%.

But till that time, we will continue to

maintain it in the range of 45% to 47% mark.

Mr. Pravesh Kumavat

Just a last bit, will NCDs be our primary route going forward as well as we expand our

Mr. Hare Krishna

100% of our debt as of today is in the form of NCDs.

The additional borrowings which

we are going to take, will try to bring it in the form of term loans which are linked to repo-

rate so that there is a natural hedge between the inflows which we receive and our

intrinsic expenditure.

So that's our strategy going forward.

Mr. Pravesh Kumavat

If I have more questions, I'll come in the queue.

Moderator

Next question comes on the line of Mr.

Rohan Shah with AJ Investments.

Please go ahead.

Mr. Rohan Shah

Thanks for the opportunity.

So, I just wanted to understand, as our NDCF, Net

Distributable Cash Flow for Q2 was INR 104 crores.

So, could you share how NDCF is

expected to evolve after integration of three ROFO assets?

Mr. Hare Krishna

See, with the addition of the three ROFO assets, our NDCF is going to improve only

because these three are operational assets.

For two of them, we have already received

three annuities.

And the third one, we will be receiving one annuity soon.

If I were to answer it from other parameters, then for instance, with regard to the

enterprise value, the assets are coming at 9% discount to the fair market value.

therefore, they are going to be accretive.

At this stage, because we are still working on

the acquisition, and, we are still working on the fund raise.

Therefore, to anticipate the

number of units to be allocated for this acquisition, is still open at this stage.

it will be difficult to comment on the precise NDCF addition which will happen from the

But overall, it will remain accretive.

Mr. Rohan Shah

That's helpful, sir.

So, one more question.

Can you provide the current split

between fixed versus floating debt and the targeted mix over the next 12 months?

Mr. Hare Krishna

So as of now, we have two series of debentures.

For the first series, the rate of interest

is fixed for three years since we took it, which is up to March '28.

For the other series,

the cost of debt is fixed until March '26.

Mr. Rohan Shah

So that's from my side.

Thank you, sir.

Moderator

Next question comes from the line of Advit Kumar with AV Advisors.

Capital Infra Trust

November 18, 2025

Mr. Advit Kumar

Thank you for taking my question, sir.

I have a few questions to ask.

So, I wanted to

understand what is the expected timeline for completing the acquisition of three assets

And what is your estimate of increase in NAV once these assets are

Mr. Hare Krishna

See, as of now, we are working on raising both equity and debt capital to finance the

And we intend to close out over the next 60 to 90 days from today.

received the unitholders’ approval in October, 2025.

And thereafter, we have been

working in this regard.

With regards to the NAV per se, our current NAV as of today is around 67.48/unit.

preferential allotment, this will marginally increase further to the range of around 69/unit.

Again, with regards to the NAV impact of the three assets, we can give an exact number

only when the number of units and the unit price of equity fund raise is being

established, which we are yet to do.

So therefore, at this stage, the estimate would be somewhere in the range of INR 73 to

INR 75 once the equity raise and debt raise has happened, and the assets have been

Mr. Advit Kumar

I understand, sir.

But then, sir, one more thing.

On these three right of first offer,

so assets that are being acquired, what is the expected equity IRR also?

it compare with the current portfolio we have, current portfolio IRR?

Mr. Hare Krishna

So, for these three assets which are proposed to acquire right now, since they are at

9% discount to the enterprise value, the corresponding standalone IRR of these three

ROFO assets is quite high.

It's in the range of above 14% range per se on a standalone

basis for these three assets.

Mr. Advit Kumar

Sir, last question from my end.

Going forward, what is your long-

term approach or the guidance for DPU?

If you could share some outlook for the next

year and maybe, let's say a couple of years or at least next year?

Mr. Hare Krishna

So far, this financial year, we are pretty much in line with the guidance which

we have provided in the beginning of the year.

Going forward, our projects can sustain

a cash yield of somewhere between 10% to 12% in that range.

And that's what we can

provide right now.

The exact guidance we can give only at the beginning of the year.

As of now, what we

can convey that our strategy would be distributing cash yield of 10% to 12%.

Mr. Advit Kumar

Understood, sir.

I think this answers my questions.

Thank you so much for

answering them in detail.

Moderator

Next question comes from the line of Ms.

Aisha Shah with Value Worth

Please go ahead.

Capital Infra Trust

November 18, 2025

Ms. Aisha Shah

Thank you for the opportunity.

Sir, you have mentioned regarding INR 420 crores debt

repayment plan by December.

Post this reduction how do you see the leverage ratio

shaping up by FY26 end?

Mr. Hare Krishna

We plan to repay our debentures by around INR 420 crores, of which INR 345 crores

is from the preferential allotment and additional INR 75 crores from our internal accrual.

And as of November 14, 2025, the debt ratio and the leverage, which is around 45.6%,

including this cash element as well.

So, from here on, we would endeavor to remain in

the range of 45% to 47% mark with regards to the debt leverage to EV ratio.

Ms. Aisha Shah

Thank you, sir.

So that's all from my side.

Moderator

Next question comes from the line of Anant Mundra with Mytemple Capital.

Please go ahead.

Mr. Anant Mundra

Thank you for the opportunity.

Sir, just wanted to understand the current NAV

calculation is based on what borrowing cost, like what is the borrowing cost that has

been assumed by the value of?

Mr. Hare Krishna

So, that's based on the current borrowing cost, which has been assumed by the valuer

which is 7.68%.

Mr. Anant Mundra

But there is a reset clause, right?

So, this rate should go down in future.

understanding is correct, right?

Mr. Hare Krishna

Yes, that's correct.

And that's what we are also working towards.

managing the additional borrowing, which we are going to take immediately to finance

the acquisition of three assets.

That's going to reduce the overall cost and partially, one

of the series of NCDs, for which put call option is available in March next year.

we will try to refinance them so that we have an efficient debt profile and competitive

Mr. Anant Mundra

So, that upside has not been captured in the current NAV calculation because

that could potentially come in future.

So, March’26 is the first NCD reset clause, right?

Mr. Hare Krishna

You are correct.

The valuations are based on the current cost of debt, which is at

So, this will happen once we will completed the exercise.

Mr. Anant Mundra

And sir the prepayments you are doing for the NCD, I think about INR 420 crores.

So, is there any prepayment penalty also that we will have to pay on this?

Mr. Hare Krishna

No, not for this.

This is permitted and we will not be paying any prepayment penalties

for paying this now.

Mr. Anant Mundra

And sir by when do we plan to complete the three acquisitions?

timeline that we have?

Capital Infra Trust

November 18, 2025

Mr. Hare Krishna

So, we are pretty much working on it.

Our endeavor would be to complete it within the

next 60 to 90 days.

That is our target right now.

Mr. Anant Mundra

And how are we trying to fund the equity portion?

Will it be a unit swap or will we

be doing another pref.?

Mr. Hare Krishna

In total, we will be requiring around INR 2,400 crores to complete the acquisition, of

which at this stage our planning is to raise equity funds of around INR 1,250 crores,

either through QIP or a preferential allotment and around INR 1,150 crores as debt, that

is our overall target right now.

Mr. Anant Mundra

And sir, just one final question.

What is the investment manager and the project

manager's fee that is paid from the trust and is there also any kind of some incentive

fee that the manager is entitled for on acquisition?

Mr. Hare Krishna

No, not really.

The investment management and the project management fee pretty

much remains the same, which was disclosed at the time of IPO.

For every project, our

investment management fee is 1.1% of the revenue.

And project management fee is a

fixed amount, which is payable for completing the entire operations and maintenance

of all the assets, which was, again agreed at the beginning of the project itself and at

the time of IPO.

So, there is no variation in that part of the fee.

Mr. Anant Mundra

And incentive fees?

Mr. Hare Krishna

We don't have any incentive fee over here.

It's a mix of only investment management

fees, which comes to investment manager, and project management fees, which is

payable to GCL as part of project management fee.

Mr. Anant Mundra

And sir, any update or any color that you can give on how are we thinking to

acquire any non-sponsored assets?

Mr. Hare Krishna

So, I want to update you on our expansion plan, first starting with the sponsor

assets itself, there were ROFO on about 17 assets, of which three we are acquiring

right now, 14 would be ready to acquire over the next one to three years, 4 to 5 assets

would be ready in the next financial year as well, which potentially means EV of around

INR 3,000 crores to INR 4,000 crores can be added with the sponsor assets

In addition, we are targeting to acquire third-party assets as well, which we are working

And in next financial year, we target to acquire at least have one to three assets in

With regards to strategy, we will continue to focus right now on HAM based

We would not like to diversify in toll assets at this stage.

Our immediate strategy

will be to just focus on HAM assets from third-party developers.

Mr. Anant Mundra

That's it from my end.

Mr. Hare Krishna

Capital Infra Trust

November 18, 2025

Moderator

Next question comes from the line of Rohan Shah with AJ Investments.

Please go ahead.

Mr. Rohan Shah

Thanks for taking my follow-up question, sir.

So, I just wanted to understand, sir,

can you provide an explanation about the InvITs strategy going forward, like five years

kind of vision?s

Mr. Hare Krishna

I think if I were to talk about a five-year vision, our strategy would be to continue

to focus on adding HAM-based road projects, because that's what our expertise is and

that's what we started with.

So, over the next five years, our strategy will be essentially

to not only focus on the assets for which we have ROFO from sponsors, but third-party

acquisitions as well.

So that in five years' time, we would be building a decent portfolio, which is diversified

and provides a stable annuity cash flow and can be distributed; thereby generating a

stable dividend income for the unitholder.

Broadly, that's what I can summarize at this

The key elements would be focus on the HAM-based road sector as of now,

target sponsor-based ROFO assets and third-party assets altogether.

Mr. Rohan Shah

Understood, sir.

That's helpful.

So, one more on the industry base.

industry scenario?

Are you seeing more projects opportunities going forward?

Mr. Hare Krishna

See, we all are aware that in the last 12 months, the number of projects being awarded

by NHAI has been relatively less compared to the previous cycle.

understand that the allocation overall is going to remain the same and the activity is

going to pick up in the second half of the financial year.

So therefore, from an industry perspective, we remain optimistic that there will be

enough opportunities for players like us to acquire assets from, even in the short term

and the medium term, both of them.

Because these are integral part of growth for the

country, for the nation.

And the overall allocation of the government in this sector

remains at the healthy level, though it may be slightly less than 2 years before, but it

overall remains at the healthy level.

Mr. Rohan Shah

Understood, sir.

That's from my side.

Thank you, sir.

Moderator

Next question comes from the line of Anjali Singh with Bansal Family Office.

Please go ahead.

Ms. Anjali Singh

Hi, thanks for the opportunity.

So, my first question is, the ROFO valuation summary

shows a combined EV of around INR 2,590 crores.

So, what is expected initial yield

contribution to NDCF post-acquisition?

Capital Infra Trust

November 18, 2025

Mr. Hare Krishna

Yes, the enterprise value is INR 2,590.

Now, it's very difficult to comment upon what

would be the yield in the first year of the project.

That's something we'll be able to

convey to you, once we have acquired and we have recast the balance sheet.

But overall, because these are being attractively priced because of the inherent

discount they are going to be accretive to the existing investors.

And they are going to

enhance the IRR and help in sustaining the DPU.

Ms. Anjali Singh

So, one more question.

So, over the next 24 months, how many additional ROFO

assets do you expect to add beyond the three targeted this year?

Mr. Hare Krishna

Around four to five ROFO assets, again will be ready for acquisition by June to July

Additional two to three will be ready towards the end of FY27.

we understand right now based on the progress of the ROFO assets as we speak right

Ms. Anjali Singh

Thank you so much.

Moderator

Ladies and gentlemen, as there are no further questions, we have reached

the end of question-and-answer session.

I would now like to hand the conference over

to the management for closing comments.

Mr. Amit Kumar

Thank you, everyone, for joining the call.

Capital Infra Trust, as we already

see, is entering into a new phase of growth, which will be driven by balance sheet

deleveraging, value-accretive acquisitions, and disciplined capital allocation.

aimed at delivering sustainable and long-term value to our stakeholders.

once again for joining the call.

Moderator

On behalf of Capital Infra Trust, that concludes this conference.

for joining us.

You may now disconnect your lines.