Ladies and gentlemen, good day and welcome to Indus Infra Trust Q3 FY 2026 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 conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Kumar Singh, Chief Executive Officer of the Investment Manager. Thank you, and over to you, Mr. Singh.
Thanks. Thanks, Renju, and good morning, everyone, and thank you for joining us for the Indus Infra Trust conference call for the quarter ended 31st December 2025. We really appreciate your continued engagement and confidence in our trust. I will begin with a brief macro and sectoral overview, followed by an update on our portfolio performance and capital allocation approach and outlook. I shall then walk you through the financial details. The operating environment for road infrastructure in India continues to remain structurally strong. The National Highway Network has expanded meaningfully over the past decade with a sharp increase in access-controlled corridors, four-lane highways and expressways. Execution under Bharatmala Pariyojana has progressed steadily with more than 21,500 km completed out of 26,400 km phase one award pipeline.
A significant proportion of those projects are implemented under HAM framework, reinforcing the long-term visibility of annuity-based cash flows across the sector. During the quarter, the cabinet approved large highway projects aggregating over INR 20,000 crores across Odisha and Maharashtra. These approvals underscore the continued policy commitment to long-term infrastructure creation, regional economic development, and multimodal integration. In the recently announced Union Budget for FY 2027, the CapEx expenditure for FY 2026 is estimated at INR 12.2 lakh crore, reflecting a continued step-up in public investment. Within this allocation towards the roads and highways sector under the MoRTH continue to remain one of the largest components of central capital expenditure at roughly a quarter of the total CapEx, broadly in line with the previous year's CapEx.
This sustained prioritization of highways reinforces the long-term commitment to network expansion and asset creation, which is structurally supportive for road InvITs as assets mature and enter monetization pathways over time. Against this backdrop, our portfolio performance during Q3 remains stable and in line with expectation. For the quarter, the board has approved the distribution of INR 3.40. Breakup of that is INR 1.44 as interest and INR 1.96 as capital repayment per unit to be paid to unitholders as of the record date, which is 6th of February 2026, which will be paid on and before 13th of February 2026. This is broadly consistent with the distribution trajectory communicated earlier and remains aligned with the underlying cash flow profile of the trust.
For the nine-month period, cumulative distribution, including the distribution approved by the board in yesterday's meeting, stands at INR 10 per unit, keeping us on track related to our stated annual guidance. We remain actively engaged on the acquisition pipeline, driving the next phase of our portfolio expansion. We executed share purchase agreement for acquisition of four HAM assets owned by KNR Constructions Limited. This acquisition of the SPV is in line with the investment strategy of our trust, which is to be yield accretive to existing unitholders, ensuring stable distribution and increase in the life of the InvIT, which is happening by 1.13 years.
During the quarter, we have also added one ROFO asset, which is GR Bahadurganj Araria Private Limited from G R Infraprojects, and we are currently evaluating few more assets from G R that we intend to add to our portfolio before 31st March 2026. The details of the same will be disclosed to the exchanges in accordance with their regulatory requirements. Looking ahead, we need to remain mindful of interest rate movements, execution timelines, quality of assets being acquired, and capital market conditions. I will now request Harshael to take you through the financial performance. Post that, we will be happy to take any questions you will have. Over to you, Harshael.
Thanks, Amit. Coming to Q3 FY 2026 performance on a standalone basis. The interest income on the loan extended by the trust to the SPVs was INR 187.41 crores as against INR 189.24 crores in the last quarter. The decrease in the interest income was on account of debt repaid by SPVs during the last quarter, amounting to INR 56.31 crores. The dividend received during the quarter from the SPVs was INR 7.75 crores, which was utilized for distribution during the last quarter. Further, coming to EBITDA. EBITDA, excluding impairment for the quarter was INR 191.02 crores. The impairment was primarily on account of difference between fair value and book value of investment. The reduction in the fair value of investment was on account of the repo rate cut during the last quarter.
The total external borrowing at the trust level stands at INR 2,425 crores, and the interest cost on the same during the quarter was INR 39.87 crores. The tax outflow getting represented for the quarter was only on the other income at 42.744%. The profit for the quarter stood at INR 87.50 crores. During the quarter, we had completed the acquisition of Bahadurganj-Araria project and the refinancing of external debt in the SPV was also completed during the quarter. Accordingly, as on 31st March 2025, there is no external debt in the SPV. Coming to the nine months FY 2026 standalone financials. Total income stood at INR 597.28 crores with an EBITDA excluding the impairment impact of INR 573.93 crores.
As compared to nine months FY 2025, the foreign revenue is on account of the lower dividend upstream by the SPV. During the nine months FY 2025, dividend distributed by the SPVs was higher on account of the release of encumbered cash by the SPVs which we had acquired as part of the IPO. Finance cost during the period was INR 115.72 crores, which is on account of increased borrowings as compared to last year, which was partially offset by the reduction in the borrowing cost. Borrowings in December 2024 was around INR 1,800 crores as against INR 2,425 crores as on 31st December 2025. On a consolidated basis, during the quarter, the total income was INR 198.20 crores, which consisted of INR 179.12 crores from revenue from operations and other income of INR 19.08 crores.
The revenue from operation includes finance income of INR 135.61 crores and revenue from contracts, which includes your O&M, COS, utility, and claims for the quarter stood at INR 43.51 crores. Excluding the impact of passthrough expenses as well as income, the O&M expense during the quarter was INR 24.90 crores as against INR 23.15 crores during the last quarter. Out of the total revenue from contracts of INR 43.51 crores, it includes INR 18.61 crores towards COS and utility shifting. Coming to the NDCF. The NDCF at the SPV level. Cash flow from operations of the SPVs and other income of the SPVs stood at INR 322.52 crores. The release of the O&M reserve during the quarter was including the release of the O&M reserve, the total NDCF worked out to INR 447.94 crores, out of which INR 441.25 crores was upstream to the InvIT.
Post adjusting for finance cost, DSRA reserve receivable expenses, the NDCF works out to INR 158.78 crores, which has been presented in slide nine of the investor presentation. Out of which INR 150.60 crores is proposed to be distributed. The form of distribution has already been mentioned by Amit just a while back. The record date for the distribution is February 6, 2026. Thank you, and we are open to questions now.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your 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. Once again, a reminder to all the participants that you may press star and one to ask a question. The first question comes from the line of Sarvesh Gupta with Maximal Capital. Please go ahead.
Good morning, sir, and thank you for taking my questions. First question is that, how should we look at the equity IRRs from the KNR assets and the other assets that we are acquiring?
The equity IRR, and equity IRR for KNR as well as the GR assets what we are looking, as we said, is basically yield accretive, if you say it. Like GR assets what we acquired was in the range of around 12% what we have been doing for the last, whatever, I think seven, nine, now this is 10th asset what we acquired. This is in the same range, and the KNR is a little higher than that.
Okay. And what are the timeline for the acquisition of KNR assets?
KNR assets, we are trying that two of the four assets, if we can acquire within this quarter. We are just trying on the best effort basis. Not very sure about that. May happen, may not happen as well because it's a function of your lenders approvals, NSI approvals, right? And KNR performing those condition precedents. So I think if that, suppose done, then we should be acquiring those two KNR assets, which is KNR Palani and Ramagiri, within this quarter. And two of the Kerala assets, that most likely will be next quarter. So maybe next year, next quarter, maybe. Could be Q1, could be Q2 as well.
Okay. And, so what [audio distortion]
Mr. Gupta, sorry for interrupting. Your voice is breaking. Can you come a little closer to the mic and speak, please?
Is it better now?
Yes. Please go ahead.
Yeah. We distributed INR 3.4 this quarter. What will be your guidance for the DPU after the acquisitions of all these new assets?
That most likely will come for the next year, and that will get included in the next year guidance. Next year guidance, I think, most likely will be giving once we give the result for say Q4, that will be sometime, say, around May. In the next quarter, we will be able to give proper guidance because see what happens in the asset acquisition, a lot of proof also happens, right? Until that we finally acquire at what value, then only we will be able to give proper guidance. I think that we should be able to give you better in the next quarter, which over the call, which is going to happen, say, somewhere in the end April or maybe first half of May.
But since this year you were going to, let's say, distribute around INR 13.4 or INR 13.5, and you are saying that these are yield accretive acquisitions. Ideally, at least this much or more should be the guidance for FY 2027. Is that the right understanding, sir?
We basically are on the right direction of understanding. But see, to the fine-tuning of the numbers, again, I will tell you will be more clearer once we acquire, say, first two assets, right? Then when we acquire, say, this two or three GR assets, what we are trying this quarter. I think then only we will be able to give you a better guidance on the numbers. I think that will be more clearer post 31st. Maybe just bear with us for maybe two more months and then by the next call you will be able to get a better guidance on that.
Okay. What is the pipeline and guidance for acquisition of any non-GR assets?
Non-GR, I think this four is what we have done signed SPA. There are two, three more situations which we are looking at and until and unless we get into an SPA, we won't be able to tell you the exact name. But in terms of situations, yeah, there are two, three more situations which we are exploring. We might get or say, sign an SPA before this quarter also. By end of this quarter, maybe Q1 next year. But two, three more situations we are looking at.
Okay. We also saw some release of O&M reserve in cash flows. Do the banks allow this exemption?
It's basically what you keep at the SPV level and banks fund at the InvIT level, right? The InvIT level what is required that has been kept at SPV level. Suppose if on call InvIT may require money to fund some acquisition and all, InvIT may call and then SPV under the loan agreement can give and then again can restore those O&M reserves.
Okay. What is our incremental cost of borrowings and how do we expect our overall cost of borrowing trajectory going forward?
The trajectory what we look at is 6.85%- 7.1%.
That's your incremental?
Yeah. 6.85%- 7.1% is something what we are looking at.
Okay.
We are comfortable with 6.85%. I think we most likely should be around that levels only. Because the market has tightened, and I think because of the liquidity. It should range between 6.85%- 7.1%. That is what the guess I have.
These acquisitions which you have already announced, post that, how much will be your LTV?
It depends how much asset I will be able to take. Suppose if I take three assets of GR and two assets of KNR, I should be around 50%, 52%, 53%.
No, after all the assets of KNR and whatever you have announced for GR, how much will it be?
After all the assets of KNR, basically this will be a process. We may have to go for a fundraising. How much fundraise you do, right?
Okay.
Then depends your leverage will come down. Everything is not that crystal clear now that, okay, if I take this asset, I will be this. Because the entire acquisition can't happen using complete leverage. You may have to go and do some fundraising. But the initial, what is saying happens for this quarter, if I do that, I will be somewhere around, say, 52%-53%.
Okay. This quarter we also saw much higher capital repayment. Going forward, how should we assume the split between interest stroke dividend and capital repayment?
It will be again predominantly interest and capital repayment. Most acquisition you could see some dividend because some again, your reserves get filled up and you just upstream it in the form of dividend. So depends how many assets you are acquiring. Maybe a particular quarter you can see for example a higher dividend portion. But for the year overall if you see on a consolid basis, that will be, I think, not more than 10%-15%.
The capital repayment part or dividend part?
Dividend part.
Capital repayment part, sir?
Capital repayment should be around, say, 30%, 35% and balance will be-
Of the total?
Yeah.
Understood. Okay, sir. Thank you and all the best.
Thank you. Thanks.
Thank you. A reminder to all the participants that you must press star and one to ask a question. Once again, a reminder to all the participants that you must press star and one to ask a question. 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 Mr. Amit Kumar Singh for closing comments.
Thanks, Renju, and thanks again everyone for joining this call. We will keep you all posted on the further developments, and if you have any queries, please don't hesitate to reach out to us. Thanks, everyone. Thanks again. Thank you.
Thank you. On behalf of Indus Infra Trust, that concludes this conference. Thank you for joining us. You may now disconnect your lines.