Ladies and gentlemen, good day, and welcome to the Indus Infra Trust Q1 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 touch-tone 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. Singh.
Thanks. Thanks, Rakha, and good afternoon, everyone. 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 earning calls for FY 2026. Let me begin by recognizing the government's unwavering push towards the infrastructure development. With the national highways network now crossing 1.46 lakh km, India now proudly holds the distinction of having the second-largest road network in the world. Under the Honorable Prime Minister's Viksit Bharat @ 2047 vision, the Ministry of Road Transport and Highways is not just laying roads, they are actually laying down the building blocks for long-term economic transformation for the country. The pace of highway 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 or 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 investors like us. 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 nine HAM road assets. Operational performance remains strong, and the portfolio has an average residual life of over 11 years. Annuity receipts have been in line with expectations, and our collection cycle remains healthy and timely. We have remained disciplined 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 INR 3.25 for Q1 FY 2026, broken down into INR 2.78, which is INR 2.78 paise interest, 4 paise is dividend, and 43 paise as capital repayment. With this, our cumulative DPU since listing now stands at INR 17.45 per unit, underscoring our consistent focus on delivering stable and predictable returns to our unit holders. On the acquisition side, we have kicked off due diligence on a new ROFO HAM assets offered by GR, targeting to complete it within this quarter. We are also 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're 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. After his presentation, we'll be happy to take your questions. Over to you, Harshael.
Thanks, Amit. Coming to Q1 FY 2026 performance on a standalone basis. The interest income on the loan extended by the trust to the SPVs was INR 185 crores as against INR 175 odd crores in Q4 FY 2025. The increase in the interest income was on account of the debt on lend to Galgalia-Bahadurganj road project, which we had acquired in Q4 FY 2025. The dividend received during the quarter from the SPVs was INR 9.09 crores, which was utilized for distribution during the last quarter. EBITDA, adjusted for the impairment for the quarter, was INR 192.95 crores. The impairment, which is getting reflected in the standalone financial, is on account of difference in the fair value and the book value of investment. 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.
The total external borrowing at the trust level stands at INR 2,114 odd crores, and the interest during the quarter on the same was INR 37.5 crores. During the month of May, we had availed additional borrowing of INR 382 odd crores to refinance the external debt of Galgalia-Bahadurganj road project. The tax outflow, which is getting represented in standalone financials, is only on the other income, which is owned by the trust. Coming to the consolidated financials. During the quarter, the total income was INR 204.48 crores, consisting of INR 186 crores from revenue from operations and other income of around INR 18 odd crores. The revenue from operation includes finance income of INR 155 crores as against INR 186 crores in last quarter. The reduction in the finance income is primarily on account of reduction in the bank rate, resulting in lower financial income in the SPVs.
The revenue from contracts during the quarter was INR 31.33 crores as against INR 64.58 crores in Q4 FY 2025. 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 INR 24 crores as against INR 19 crores in Q4 FY 2025. Coming to the distribution. In relation to the NDCF computation, which is shown on slide nine of the presentation, the SPV level cash flows from operations at SPV, including the finance income, was INR 291.8 crores. Considering the debt obligations at the SPV level, an amount retained at the SP level to meet the current liabilities, the net distributable cash flow worked out to INR 221.59 crores. Out of this, the total distribution which is upstream to the trust was INR 215.27 crores.
The form of distribution was INR 184 crores in the form of interest, repayment of debt of INR 28.55 crores, and dividend amount of INR 2.74 crores. Post adjusting for trust level expenses, finance costs, desired reserve requirement, the NDCF for the quarter worked out to INR 147.1 crores. Out of which approximately INR 144 crores is proposed to be distributed, resulting in a distribution of INR 3.25 per unit. The form of distribution was earlier mentioned by Amit, and the amount will be distributed within five working days from the record date, which is August 4, 2025. Thank you, and we are open to questions now.
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 touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Siddesh Chaudhary from Maximal Capital. Please go ahead.
Sir, what is the AUM growth targets for FY 2026, 2027, and 2028 from the ROFO asset?
I think with the accretion what we are targeting this year from ROFO assets.
Sorry to disturb you, sir. Mr. Siddesh, I will request you to keep yourself on mute because I can hear echo from your line, sir.
If you see the accretion what we are targeting this year from GR ROFO assets and non-ROFO, I think for at least FY 2026 we should add almost INR 3,500 crores to INR 4,000 crores of the AUM this year, which is 2026. And 2027, if I tell you, we should again add, say, to the tune of maybe INR 5,000 crores in 2027. And if you see 2028 again, it is going to be almost INR 5,000 crores to INR 5,500 crores. That, I can tell you the pipeline what I can see from the ROFO and the non-ROFO assets which we are evaluating now and we are in the advanced stage of either signing into a definitive agreement or signing into a non-binding something. Of course, this will get pulled up further if we suppose able to close more non-GR deals.
I think INR 3,500 crores to INR 4,000 crores this year, and maybe you can say INR 5,000 crores to INR 5,500 crores, for the next two years, which is 2027 and 2028. Yeah.
Okay. And secondly, on the distribution, sir, this quarter we have distributed INR 3.25. Is able to expect that this year full year distribution can be INR 13 or more for FY 2026?
Look, if you put 3.25 into four, that number comes. The guidance what we had given was 12.5 on the first call. I think we will stick to the guidance. Whatever we distribute definitely will be more than the guidance what we gave. That can be more than 12.5 also.
Okay. I think this quarter we had more share of the capital return. What could be the split going forward for interest and capital returns, assuming dividend is small for the coming years?
I can tell you for the next three to four years, at least I can tell you maybe four, five years, dividend is going to be minimal now. Primarily, it is going to be a mix of interest and basically repayment of capital. If I tell you this year is going to be most likely, say, 41% interest plus 8% to 9% dividend, that is capital repayment of 50% interest and dividend for this year. Next year, this is going to be, I think, two-thirds interest and dividend and one-third of capital repayment. I think same for the year after next. This is the basis the assets we have now.
Once I take new assets, this will change.
50/50 for this year and two-thirds, one-third for the next two years.
Ballpark, yes. Ballpark.
That's all from my side, sir. Thank you.
Based on the nine assets what we have now. Once we take more assets, again, that contributes more towards dividend initially, and it may change to certain extent.
Okay. That's all from me. Sure.
Thank you. A reminder to the participants, please press star and one to ask a question. Participants, to ask question, please press star and one. The next question is from the line of Anant Mundra from Mytemple Capital. Please go ahead.
Hello. Thank you for the opportunity. Sir, what would be the current IRR after the recent rate cut?
Recent rate cut?
Yes.
Recent rate cut, I think IRR, ballpark I am 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 include that asset also. But I think, ballpark if I tell you, it should be around 10% odd .
Okay.
A tad above 10%. But yeah.
No, but why would it reduce so sharply? Because I think we were at 12.12% and then there was a 75 basis points rate cut after that.
No, that is what I am saying. 10% that I am saying, this is on the current market price. Because the market price.
Oh, no. Yeah. I was just talking with reference to the 12.12% that you had mentioned. That would drop to what level?
This 12.12%, I think it should be in the range of what we had shown last was around 11.9%.
It should be around 11.9% now.
Ballpark 12%, approximately. Yeah.
Okay. Then two more assets we are going to acquire in this quarter from GR.
One more asset, sir.
One more.
Yeah. Three 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.
Okay. This INR 3,500, INR 4,000 crores EV that we are trying to add is only from the GR assets?
No, this is GR and non-GR both. Whatever we distribute, that also goes back. I am taking you INR 7,000 to, we will touch around INR 10,500 to INR 11,000, post our distribution.
Got it. Next year, INR 5,000, and then the year after that, you mentioned another INR 5,000. That is only from GR, is what you are factoring in?
Year after that, almost INR 6,000 crores, and year after that, around INR 5,000, INR 5,500 crores. That is from GR and the ROFO assets 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. The more clarity will emerge, say, by end of this year.
Okay. What would be our plan for fundraising? I think maximum leverage that we will take is about 55%. That is what you had mentioned in the last call. What would our plan for fundraising be? I think we need funds this year itself. Is that understanding correct?
No. If you see on the gross basis, our leverage is around 28%-29%. I can go up to what we have said that we will go up to around, say, 60%-62%-63% of the overall leverage we can because now with this quarter of distribution, my sixth quarterly distribution would be done. So actually with the unit holders approved, I can take my leverage up to whatever the permissible limits. But currently, of course, nobody wants to go, nobody wants to touch that. So around 60%-62% odd. So I have a decent room to acquire, say, at least next three, four, five assets I can acquire through basically my leverage only. I think plan for the fundraising, unless I get some good opportunity where the money may be required.
Otherwise, it is going to be either in Q4 or maybe sometime next year only.
Okay. What would our current cost of debt be after the next
Current cost of debt, sir, is currently, ours is 7.1%, and this is linked to repo.
Sorry, I missed the number.
7.1%.
7.1%.
Yes.
Okay. Got it. And sir, final question. Maintenance contract. What is our lock-in for the maintenance contract with GR?
Maintenance contract, sir, when we had signed, this is seven years and seven plus seven. So for the first seven years, then we have a right to review, both of us, and then we can further extend it to seven years.
Okay. But for seven years, there is a full lock-in?
Definitely. Yes.
Both sides. Okay. Got it. That's it from my end. Thank you.
Okay. Thanks.
Thank you. A reminder to the participants, please press star and one to ask a question. Reminder to the participants. Please press star and one to ask a question. The next question is from the line of Siddesh Chaudhary from Maximal Capital. Please go ahead.
Sir, just one more question on the industry per se.
Sorry to interrupt you, Mr. Siddesh Chaudhary. Once you are done speaking, keep yourself on mute because there is echo coming from your line, okay? Now you can speak.
Is it better now?
Once you are done speaking. 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?
Okay.
Thank you.
Yeah. This was more like a general question to the industry. I think there are two things that we are seeing. One is the slow ordering in general. People are not able to get much road efforts to work on basically here. Secondly, because of that, they may not want to sort of recycle their balance sheet because there is not much of an order book which is coming through. How do you see the situation evolving?
Mr. Siddesh, sorry to interrupt you. Your voice is coming from distant now. Can you please be a little louder?
Hello.
Yeah. Go on, yeah.
Yeah. The question was that how do you see this sort of a situation evolving and any impact that it can have on our acquisition plans?
I think if you see the last, I think the couple of years, including last year, have seen some moderation in HAM awards. Even the awards which were done, actually, there is a very intensive bidding and it actually went to a lot of, you can say, new emerging players as well. But I think NHAI currently now coming with couple of guidelines where they will be like very recently they came up where they said that, okay, suppose you bid for INR 1,000 is your order book, and you bid for some new projects. 20% of that will get adjusted against your overall, basically bid size. From your net worth. Now what is going to happen is that I think these kind of regulations and of course, authorities may come out with other kind of things also.
This actually will give some rationalization back in terms of your bidding. Then you can see that basically you will start seeing more awards coming from authority. Second thing is what I understand is that also there is one reason NHAI and MoRTH they are not awarding much of the projects is because new revision they say that minimum 80%-90% of the land till the time is not there, they do not even award now. With that, what will happen, of course, the land acquisition eventually, which actually used to happen later after the award. Now they have actually sort of basically brought it back. They have front-ended it. Because of that, what is happening is that, of course, the awards are taking a little more longer.
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, NHIDCL and MORTH, some awards are coming, but that is not of the bigger size. It is going to the, I would say, maybe comparatively not so bigger players.
Do you see because there is being some of the awards, do you see that affecting the propensity of the developers to offload some assets to the InvITs or the REITs?
Sorry, Siddesh. Your voice was a little feeble.
Yeah. I was asking that since there has been a lull period. Do you see that impacting their propensity to offload the assets to other InvITs because already many of these developers are very cash-strapped right now, balance sheets are weak. So they may not want to sell down more to the InvITs.
Actually, if you see here, what we are seeing is if you can just put yourself on mute because the voice is echoing. Yeah. If you see, the trend what we are seeing that, of course, as you see, if you see the last two years, the awards has been. The basic primary analysis of that throw 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. What bigger players you can see across the players, you can see basically a theme of diversification. They are getting into the different infra segments. Whether it could be water, it could be roadways, it could be transmission, it could be railways, it can be building a factory.
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 capital. That is not the case. What we can see the trend is that even the bigger guys who haven't got, they are actually evaluating or deliberating the recycling of the capital because that capital is required in turn to put in the newer segments. 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's a cost of learning as well. I don't see that even the no new projects being awarded will sort of hamper basically monetization of roads from these guys because their balance sheet is strong.
Yeah, I agree, balance sheet is strong, but I think opportunities are being explored and are being deliberated across the developers.
Thank you, sir, and all the best for the coming quarter.
Thanks.
Thank you. Before we take the next question, we would like to remind participants that you can press star and one to ask a question. The next question is from the line of Deep from Bandhan AMC. Please go ahead.
Congratulations, sir, on a stable and more than expected guided DPU. Just one thing, 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? If the traffic is low, then NHAI will reimburse the company, and if traffic is high, then the company will pay back to NHAI. 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 will you stick to HAM only? If you can just throw some light on that.
Thanks, Deep. Actually, there are two different things. If you see, of course, what we had recently got to know that there is one more new BOT framework which Ministry of Road Transport and Highways is going to come out very soon. I can tell you about the recent one where what is happening is that if suppose you get higher traffic than the estimated traffic of a given year. What is happening is, and I am talking about the current agreement, current basically BOT agreement, where Model Concession Agreement I am talking about. There what is happening is that your concession gets reduced. Okay. Suppose to the extent of 20% of your overall concession period. If suppose you do not get the higher traffic or your estimated traffic in a given year, of course, there a recompetition happens and then you get an extension, which is again to the maximum of 20%. Okay.
This is what the formula given now. I think what you asked is that this INR 3,000 and basically 200 rides. That is a 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 basically what should be the periodicity for that payment to happen from authority. Everything is being worked upon. Nothing has been finalized or this or that thing because there are a lot of guys who have got impacted because of a lot of car traffic. They are just doing that.
But I think your question was more towards the answer given in the first part, which is Model Concession Agreement, where there is a provision of extension or reduction of your concession on account of traffic which is being achieved or not achieved on a given date, and that is against the estimated traffic.
Okay.
Hope I am clear what you asked.
Yeah, definitely. Do we have any plans to diversify into that segment or we are planning to stick to HAM only? Because now eventually there also cash flow certainty will rise. Not definitely like HAM, but up to some extent, if you can throw some light, I think. Also, they are going to get some norms for 90% of the right of way thing. I am not sure on that, but if you can just throw some light.
Yeah. That is very clear that under BOT, if you have a right of way, but until and unless that concession or that project is not being put to use for the economic purposes, of course, there won't be anything. When you get a BOT, of course, you would want to be very sure of the right of way, because once you construct, of course, you will also start collecting the toll.
Coming back to our strategy, I think we have been very clear since day one when we went to the market to our investors that we would want to maintain a strategy where this InvIT, the underlying assets of this InvIT, not necessarily be HAM, but yeah, 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 tenet or basic fabric of my InvIT. Because I want to keep giving the steady and consistent returns or DPU to my unit holders. Whatever I take, there should be a proper track record, so I don't want to take, say, under-construction BOT.
Even if I take a BOT, that should be if I am buying from somebody or even from, let's say, a Kamanjal 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 down to. 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. Of course, that we model properly, and after evaluating that, subject to a certain size of my AUM, we will 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.
Of course, we may also have to start looking at that. But of course, that will be done with the proper discussion and deliberation with our unit holders also. Because that has been our basically idea since the time we came through this IPO, that whatever we do will bounce it off to our unit holders or maybe have a proper discussion. I will come to you for your approval so that what we are doing as a strategy, as a proper thought-out strategy should not be disturbing my distribution history or my distribution guidance.
Perfect. Sir, just a last question, a follow-up on that. I think we have considerable amount of acquisitions due at least for 20.
Sorry, just come again.
Can you hear me now? Am I audible? Hello?
Yeah, you are audible. Please go on.
Sir, only one thing, since we have considerable amount of acquisition already due for 2026, 2027 on GR. Is a proposition of BOT or are we going to take it up in near future or it is a kind of later a step which may do over a course of time?
See, our timeline has been very clear, and it is not that anything which I can do as per my wish. This is a proper timeline which has been actually defined. If you see in the concession agreement. First I will come to my InvIT. My InvIT allows me to take an asset which is InvIT-able only if it should have a revenue generation track record of one year. If I take an example of a HAM asset, I can only take an asset from anybody, whether it is a GR under ROFO or a non-GR asset. Then two annuities of one year would have been passed by. Only thing is that NHAI actually can give you the change of control even after, say, payment of first annuity, which is six months. But generally it takes some timelines also which you take in terms of consummating the transaction.
Generally, when I take asset, actually, practically one year passes. All the assets what I said from GR what I am going to take under ROFO, whether it is at 2026 or it is at 2027, it will also follow that timeline. In terms of BOT acquisition timeline, of course, we keep evaluating the BOT assets. But there is no timeline, because any BOT asset which I start evaluating now, also easily it is coming on board will easily take you through at least past 2026. So you will easily enter 2027. But as of now, of course, as a process you keep evaluating, but there is nothing, no BOT assets where I can give you any timeline. So everything is under consideration, under evaluation.
Okay, thank you. All the best. Thank you.
Thank you. A reminder to the participants, please press star and one to ask a question. As there are no further questions, I would now like to hand the conference over to Mr. Amit Kumar Singh for closing remarks.
Thanks, I would again want to thank all the unit holders who joined in this call. I wish all of you a good day, and we'll keep you posted on any substantial developments which will happen on our side. Thanks again. Thank you.
Thank you. Ladies and gentlemen, on behalf of Indus Infra Trust, that concludes this conference. Thank you for joining us, and you may now disconnect your line.