Ladies and gentlemen, good day and welcome to the Indus Infra Trust Q2 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, the Chief Executive Officer of the investment manager. Thank you, and over to you, Mr. Singh.
Thanks, Arthur, and a very good morning to everyone. A warm welcome to Indus Infra Trust earnings call for the quarter and half year ended 30th September 2025. It is always a pleasure to connect with all of you once again and share the updates on our progress. Let me start by talking about the continued momentum we are seeing in our sector. Under the Honorable Prime Minister's Viksit Bharat @2047 Mission, the Ministry of Road Transport and Highways has been leading several projects of national importance.
We have seen a number of significant highway projects launched and approved across multiple states. For example, the six-lane capital region ring road in Odisha, with an investment of approx INR 8,300 crores, INR 4,447 crores Mokama-Munger highway speed corridor in Bihar, and INR 2,157 crores Marakkanam-Puducherry section along with the East Coast economic corridor.
In Andhra Pradesh alone, 29 new projects spanning 272 km and valued at over INR 5,200 crores have been initiated to strengthen last mile connectivity and ease congestion in tier one centers. Altogether, these initiatives are expected to generate more than INR 1.5 crores mandates of direct employment, improve logistics efficiency and make travel safer and smoother across regions. From an investment point of view, India continues to be a global bright spot in infrastructure development. InvITs have now become an integral part of the country's infrastructure financing strategies.
The sector is very close to touching almost INR 8 lakh crores of AUM and is expected to continue growing strongly over the next five to seven years, supported by robust investor confidence, steady cash flows, and government's ongoing focus on asset monetization. Now coming to key highlights for the quarter. As of 30th September 2025, our operational and financial performance at Indus Infra Trust continues to demonstrate our discipline.
Our portfolio of nine operational HAM road assets have been performing strongly, and our leverage remains comfortable at around 31.6%, which is giving us good headroom to pursue future acquisition. Our annuity receipts have been timely, and the collection cycle remains healthy. On distribution, the board has approved a payout of INR 3.35 per unit for the quarter ended 30th September. This comprises INR 2.51 as interest, INR 0.10 as a dividend, and INR 0.74, which is 74 paisa as a return of capital.
The record date for this distribution is 12th of November 2025. With this distribution, our cumulative DPU for H1 FY 2026 stands at INR 6.6, and since listing INR 20.80 per unit, continuing our track record of consistent and principal returns to our unit holders. On the acquisition front, we are now in the advanced stage of due diligence for our next set of ROFO and non-ROFO assets. We continue to follow a disciplined and selective approach with a focus on quality and long-term value creation. Looking ahead, we see a strong and sustainable opportunity pipeline.
Matured InvITs like ours are increasingly leading the acquisition of seasoned assets, and the model is clearly evolving from being a funding platform to becoming a long-term value creation engine. Our strategic priorities remain clear: operational excellence, prudent capital allocation, and responsible growth. With a strong balance sheet, stable cash flows, and alignment with the national infrastructure vision, our trust is well-positioned to play a meaningful role in India's multi-trillion rupee infrastructure journey. Thank you once again for your continued trust and partnership.
Now I'll just hand it over to Harshael to take you through the financial details for the period. Over to you, Harshael.
Thanks, Amit. Coming to Q2 FY 2026 financial performance on a standalone basis. The interest income on the loan extended by the trust to the SPVs was INR 189.24 crores as against INR 185.05 crores in Q1 FY 2026. The increase in interest income was on account of debt on-lent to GR Galgalia Bahadurganj Highway project to refinance the external debt in the SPV in the month of May. The dividend received during the quarter from the SPVs was INR 2.75 crores, which was utilized for distribution during the last quarter.
Further, EBITDA excluding for the impairment for the quarter was INR 189.96 crores. The impairment was on account of difference in fair value and book value of investments. The reduction in fair value of investment is primarily on account of the cash upstream by the SPVs. The total borrowing at the trust level stands at INR 2,240 crores, and the interest cost for the same during the period was INR 38.31 crores. The tax outflow getting represented in the standalone financials is on the other income earned by the trusts at the rate of 42.744%. The profit for the quarter stood at INR 36.49 crores.
Coming to H1 FY 2026 financials, the total income stood at INR 394.85 crores with an EBITDA of INR 382.91 crores, excluding the impairment. As compared to H1 2025, the fall in revenue was account of lower dividend upstream by the SPV, which was on account of release of encumbered cash by SPV. During H1 2025, which was there on account of the assets acquired at the time of IPO. The finance cost during the period has increased to INR 75.85 crores, which is on account of increased borrowing to refinance the external debt of GR Aligarh Kanpur Highway and GR Galgalia Bahadurganj Highway project.
Coming to the consolidated financials. On a consolidated basis, the total income was INR 139.66 crores as against INR 123.42 crores towards revenue from operations and other income was INR 16.24 crores. The revenue from operations include finance income of INR 97 crores as against INR 155 crores in Q1 FY 2026. The reduction in finance income during the quarter was on account of the impact of reduction in bank rate, which we had factored in during the last quarter.
The revenue from contracts was INR 26.31 crores as against INR 31.33 crores in Q1 FY 2026, which included a GST claim of INR 5.84 crores during the last quarter. In relation to the NDCF at the SPV level, the cash from operations at the SPV and other income generated by the SPV worked out to INR 266 crores during the period. Out of which INR 254.6 crores was distributed to the trust, 95.7% approximately. Post adjusting for finance cost, debt service of trust-level expenses, which has been captured on slide nine of the presentation.
The NDCF works out to INR 148.90 crores. Out of which INR 148.38 crores is proposed to be distributed, resulting in a distribution of 3.35 per unit. The form of distribution was already captured by Amit earlier. Just to repeat, the record date for the distribution is November 12th, 2025. Thank you, and we are open to questions.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. A reminder, if anyone wishes to ask a question, you may press star and one. Our first question is from the line of Hitaindra Pradhan from Maximal Capital. Please go ahead.
Good morning, sir. First question is on the distribution per unit. In H1 itself, now we have distributed 60% of what we distributed in the last financial year of 11.2. What will be the guidance for the distribution per unit for this financial year? If you can throw some color on the various forms of return also.
Yeah. I think just one maybe clarification or rectification. Last year we distributed INR 14.2, and the INR 6.6 put together of INR 14.2 is not, I think, still lesser than 60%. It works out to around 46.5%. I think guidance at the start of the quarter, start of the year, we had given for INR 12.5. We are very much, if you see what we have distributed or proposed to distribute in the first two quarters is actually towards the guidance what we have given. Maybe we can beat the guidance as well. But last year was INR 14.2, which we had distributed.
In terms of giving the breakup for the entire years, of course, predominantly it's going to be interest only. We will have basically lesser dividend and maybe repayment also to the tune of, say, around 45%-50%.
Okay. Secondly, sir, on the AUM growth guidance. Currently we are at around INR 6,700 crores. What is the expectation of the new projects which can be added to this in the remaining part of this six months and for next year?
In the remaining part of this, I can talk about 4.5 months almost, which is pending. I think we are going to almost add INR 4,000-INR 4,500 crores of the AUM in this year because most of the projects which actually are or will be acquired towards maybe one asset of GRIL which is Araria Galgalia Package Two . That should be acquired within this quarter. Then two to three GRIL and maybe two to three non-GRIL assets should be acquired into Q4. So that will take our AUM to or incremental AUM to around INR 4,000 crores-INR 4,500 crores.
So this should take us to around INR 11,000 crores-INR 11,500 crores of AUM by this year. Next year, I think, we should be able to add almost INR 6,500 crores-INR 7,000 crores of the AUM to our increased AUM of around INR 11,000 crores-11,000 crores . So that should take us by end of FY 2027. It should be around INR 17,000 crores-INR 18,000 crores.
And to reach this 18,000 odd crores, this can be entirely debt-funded, or you would need more capital?
No. Actually, for the next INR 6,000 crores-INR 7,000 crores, we can do debt funding. But again, we'll be crossing to around 60-odd percent. So we make a 65%. So just to bring it down to a comfortable level where we can again acquire the next set of assets, we may have to go for resort to equity raising. So what we are planning that maybe around, say Q1, we'll raise around INR 800 crores-INR 1,000 crores. And maybe towards Q4, we will raise around, say, again, INR 2,500 crores-INR 3,000 crores. That's the ballpark numbers we have in mind, depending on how the acquisitions strategy takes place.
Okay. So the current equity base is good for another INR 6,000-odd crores. INR 12,000, INR 12,500 crores you can reach with that.
I can reach INR 11,000 crores, INR 11,500 crores , INR 12,000 crores ballpark with the current equity. So we may acquire, say, whatever these four or five assets what we are talking this year. For this, we don't need to go for the equity raising. We can use our leverage and recapitalize.
And then from there, you would need to raise 40% in equity and 60% in debt.
Yeah, ballpark. Maybe a little conservative so we can do maybe a higher equity raising. But that we will decide that time, how this overall acquisition strategy shapes up.
Okay. And sir, in this H1, most of the InvIT REITs have reported much higher NAV because the WACC has come down because of the lowering of the interest rates. While in your case, the NAV has not increased. So can you throw some light on why that sort of a thing has happened?
See, actually, it is also a function of what is your base. First, I think you would appreciate that our base itself is smaller. And even I think our WACC has also come down, if you see, from 7.1 to 7.01. However, because of the lower leverage and the lower base, even the 10 basis points, 9 basis points of the lower WACC is not working out to a very high increase in NAV. Second thing, if you see our NAV was some, I think 15 point something.
INR 115.40.
INR 115.40, INR 115.80, I think, as on June 30th. Out of that, we distributed almost INR 3.25. If you see that way, we are actually currently at INR 112.5 or six ballpark. Our NAV has just increased because the WACC is, say, around 5- 10 basis points. Had it been a higher base and the leverage would have been higher, I think the NAV would have been higher. I think we see that. Let's see how the interest rate moves. You can see the impact of that as we are going forward. That is again a conservative side.
Going forward, let's say for the next INR 6,000 crore, when you acquire the asset using debt, what sort of a NAV impact can happen because of that before the fund raise?
That we haven't worked out. We have to see that because, again, different assets have a different capital structure. We will have to decide our capital structure as a function of what capital structure basically the target SPVs have. How finally we will take a work out on our capital structure, maybe do we say, de-lever a couple of assets because at the HAM level the assets leverage are higher. At the InvIT, you are not allowed to have higher leverage. That will be a function of how we work out our leverage depending on the target asset capital structure, and then we can arrive and then only we will be able to say that.
Okay. On slide six, you have mentioned certain impairment of investments which has caused the reported EBITDA on a standalone to be lower. What is that, sir?
I think this impairment, I have been explaining. Impairment is, maybe I will ask Harshael to explain it better. But I think this is more like when you have more equities being received, you have some assumptions you have taken. There is some little bit, say, change in those assumptions also. Everything will lead to some impairment. Maybe, but I will ask Harshael to explain it better. Yeah.
Hitaindra, coming to the full half year, if we look at the impairment amount, that also factors in two repo rate cuts which has happened. Plus, if you look at the distribution which is happening, since these are finite life assets with a fixed revenue stream. It is not like a toll asset where your revenue is going up. So that might compensate for a certain part of the distribution which we are doing. So in a finite life, at whatever amount we are upstreaming and distributing to the unit holders, that primarily gets adjusted from the asset value.
So if you look at our March valuation number, it was INR 7,036 odd crores. Which has come down now to INR 6,737 crores. Now, if you look at the differential which Amit was highlighting in the NAV, that is fundamentally the distribution which we had done in the Q1 of INR 3.25. That is also getting represented as an impairment here.
Okay. And sir, final one question on this. The incentive on acquisitions. So is it there only for third-party assets or even for the promoter asset, if you acquire, the incentive will be paid to the investment manager?
The incentive is there for all the assets. However, what we will take once we acquire, we take basically the AUM to a size what will be mixed of basically ROFO and non-ROFO assets. That will be evaluated that point of time. As of now, just to tell you, we haven't taken any incentive just because of the acquisition. IM fees, whatever we had guided, we had given guidance, it remains at the same levels. In fact, we haven't taken MPS of 10% of our IM fee last year, which we otherwise would have taken.
So we are working a very tight cost structure, and incentives and all, once it takes to a size, then we'll see how to take it. That eventually will take it to the board and our NRC and we'll get it approved.
Understood, sir. Thank you and all the best.
Thanks.
Thank you. Our next question is from the line of Rahul Nair from Axis Mutual Fund. Please go ahead. Mr. Rahul Nair, are you connected with us? As there is no response from the line of Mr. Rahul Nair, we will be moving on to the next question. The next question comes from the line of Deep Vakil from Bandhan AMC. Please go ahead.
Good morning, sir. Congratulations on good set of numbers. Am I audible?
Yeah, you are audible, Deep. Hi. Thanks.
Sir. Hi. Sir, considering this impairment part as you mentioned, it will have no impact on consolidated numbers, right? Because, as you mentioned, it is only on account of cash upstream by SPV to InvIT level.
Yeah, correct. There is nothing which is changing at the console level. Yes. Some at least bits of repo cut plus cash being upstream. All these will lead to an impairment because this is not a tool asset where you can increase the growth and again you can increase the value so that you can restore the impairment. In our case, this is a defined life, defined number of annuities and whatever comes in and gets distributed, of course, that will lead to your loss in the valuation of assets, which you can term it as impairment as per the accounting standards. Yeah.
Okay. Sir, one more question. The reduction in revenue, as you mentioned earlier, it is on a console basis. I think you mentioned something on it is due to release of encumbered cash. Can you just throw some light there?
Deep, this was with respect to September 2024 financial.
Right.
When we did the IPO because of the existing lenders which were sitting at the SPV level, there was a requirement of DSRA major maintenance reserve, which was created and kept at that SPV level based on the existing debt. Once we refinance that external debt post the IPO as well as by subsequently borrowing at the trust level, those cash got released in H1 FY 2025.
Whatever the SPV level and in the trust level, whatever reserves you need to make, you make that. Suppose there is an incremental amount which gets released, generally gets distributed. That is what Harshael was alluding to.
Okay.
That was again a one-year back thing. As of now, there is nothing like that.
Yeah. I was just referring we made total income of INR 204 crores in last quarter, and it is around INR 140 odd crores now. So what we are referring to that decrease of INR 60 odd crores.
What happens when you acquire an asset, you have some DSRA and MMR requirement. When you take to InvIT level, you have some different requirement, right? Because InvIT also have to make, say, some MMR, some DSRA. So as a prudent and as a conservative view, we do that. Maybe because of that, some incremental, say, cash release, which gets again distributed. So I think that is what you will see the difference quarter to quarter, maybe half year to half year, maybe year- to- year because of that.
Okay.
Then, of course, when more number of assets will be acquired, it will lead to a different number. But that is it, basically overall concept what Harshael was trying to explain.
Okay. And sir, we were expecting the acquisition of third ROFO you had mentioned. A little in advance when you mentioned we will be doing it in current quarter and other.
Yes. This is an advance stage. One should be this quarter, as I said, two to three should be next quarter. We already started NOC process, which we expect once that happens, I think this will be a related party anyway, we will go to unit holders for the approval. Once unit holders approves, and of course, board gives in principle, board also approves, then we will go and bid and acquire these assets.
Okay. Sir, one last thing. I think we had around INR 610 crores of cash reserves last quarter, which is around INR 530- odd crores as on September end. Just a fundamental question, the distribution that we have made, so our NDCF is around INR 149 crores, INR 148 odd crores. Were the reserves also utilized or NDCF was self-sufficient? I am just trying to understand that.
I do not think reserve would have been utilized because if you see the entire NDCF, what Harshael was explaining.
Yeah. If you divide that by the unit, we will get that INR 3.35.
No. If you see the entire NDCF was INR 266 odd crores, which was basically what we had got, 176, + 8, + 89.1, I think the breakup he had given. Post that, of course, you add back some release which happens. Then you add whatever balance at the start of the quarter. Then InvIT also have to basically pay its loan what we had taken. So there is some finance cost on the borrowing. That was, I think, INR 38 odd crores. Then InvIT had to pay debt that was INR 52 odd crores. There is some statutory other payments, and I think some reserve created under loan agreement.
So that was all about INR 103.53. So if you reduce that from the overall balance, that was coming out around INR 145.76. We had some cash surplus. We added that back and INR 148.91 which worked out to INR 3.35.
Okay. So what will be the latest cash reserves available as of September end? Around INR 5 crore-ish as in the other equity mentioned in the financials.
I think we just need to check with the investor. We will have it mailed to you separately.
Sure. Okay.
There in the financial statement you can see that.
Yeah. I was just confirming. I have already seen it. Just confirming it majorly pertains to only cash reserve. That is it.
Yeah. If you see in the financial, it is there.
Okay. All the best, sir. Thank you.
Okay, thanks.
Thank you very much. Ladies and gentlemen, a reminder to all participants of the conference that if you wish to ask a question, you may press star and one on your touchtone phone to join the question queue. Our next question comes from the line of Anant Mundra from Mytemple Capital. Please go ahead.
Hello. Thank you for the opportunity, sir. Just want to understand. We have a waiver for MMR reserves. That understanding is correct, right?
At a trust level, yes, we have. What happens is, suppose any year MMR is due this year, for example, or next year early thing. Suppose annuity, we also have to time the annuity rate. Suppose whatever the annuity is there, then because if the trust has to do MMR, the money has to come from SPV. As a prudent practice, you do keep some reserves at your SPV level also, so that if the MMR comes as per the timing of course, matching with the annuities and cash flows and the amount of the MMR, you keep some reserves at the SPV level also.
Okay. This MMR reserve requirement is a requirement by NHAI or by bankers?
See, bankers, of course, they put MMR. At the SPV level, generally most of the bankers here. At the InvIT level, of course, we got the waiver but in case you want to have, because if suppose you have any MMR due, you should have it. Concession agreement also just talks about vaguely that you should have reserves in the property in case of any major maintenance expenditure is done. Consider under concession agreement also you have some requirements to keep. As a safer practice, you should.
Because suppose we have two of the assets, which is my Phagwara-Rupnagar, which I think the MMR should be towards Q4 or Q1 of next year. Then I think Vadodara-Sinor also, we should have MMR due in 2027. The amount is due. The one or two annuities are not sufficient to take care of those MMR because we have to do the debt servicing also. That is why you need to have some reserves so that there is no basically stress in case as per the timing and it is happening. That is why as a prudent practice, you do keep some basically reserves in form of MMR at the SPV level also.
Okay. Are these requirements factored in by the valuers when they do the valuation?
Yes, they do that. Everything is factored.
Okay. Got it. Sir, my next question was on previous quarter you had guided that we would be completing one acquisition by the end of Q2, but it seems there has been a delay. What has been the challenge at that end?
No. I think there was some work which was to be done by GR. What happened is because of the incessant rains this time, in fact, in that stretch, even five, seven days back also, I was talking to GR and there was some rains. Rains are if any, say, rectification or balance work which was to be done, you need to wait for the rains to get over, then only you can do. Otherwise, you do it and then rains again can basically take or maybe disturb it.
That's why I think this time the rains have extended and we are expecting that that work should be done by end of November. Maybe by end of November or first half of December, we should be able to take that asset over.
Got it. And sir, the pipeline that you mentioned, so for FY 2026, about INR 4,500 crores of assets and FY 2027, INR 6,000 crores. Like in the previous call, these numbers were slightly lower. Do you see improved visibility on the non-GR assets of acquisition of non-GR assets?
Because that is something where I can only give guidance. Where I have, say, maybe decently more assured degree of certainty, a high degree of certainty. So INR 4,000-INR 4,500 crores, I'm just giving a range for this FY 2026, and maybe around INR 6,000-INR 6,500 crores next year, putting both ROFO and non-ROFO assets.
How much would be the contribution of ROFO for FY 2026, and how much would be contribution of ROFO for FY 2027?
ROFO, if you see, is I think INR 3,000 odd crores maybe ROFO assets, and maybe around INR 1,000 crores-INR 1,200 crores, maybe ballpark, around non-ROFO assets.
FY 2026 and FY 2027, how would that breakup be?
2027, that is going to be, I think you can say almost INR 3,000 crores of maybe INR 2,600 crores-INR 2,700 crores of the non-ROFO assets. And maybe INR 3,000 crores. It is going to be a ballpark INR 2,800 crores non-ROFO and INR 3,000 crores-INR 3,200 crores ROFO assets.
Got it. Is there some non-binding agreement that you already signed with someone for a non-GR acquisition?
Would not want to divulge those details on the call because that is something we don't prefer. But yeah, we are in a decent stage of doing it.
Got it. These assets will again also be maintained by GR itself or the existing developer? How would that work?
No. I think existing developer, I don't think other than maybe in a very select case, that would be the case. Most of the assets what we are acquiring, most of the assets, again, I'm saying, not every, will be maintained by GR.
Okay. It's safe to assume that IRR would be more lucrative in case of non-GR assets?
Yeah. I think it's safe to maybe.
Okay.
It's maybe safer to assume that, yes.
Got it. Well, that's it from my end. Thank you.
Thank you. Thanks.
Thank you. A reminder to all participants of the conference that if you wish to ask a question, you may press star and one on your touchtone phone. As there are no further questions, I would now like to hand the conference over to Mr. Amit Kumar Singh for the closing comments.
Thanks, Akash. Thanks everyone for joining the call. We will keep looking forward for the support and guidance what we are getting from you all. Any development which is required to be brought to your notice, we will keep doing that. Thank you so much. Thanks again. Thank you.
On behalf of Indus Infra Trust, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.