Afternoon, everyone, and welcome to Q2 and H1 FY26 post-result earnings call of Ircon International Limited. I'm Bhumika, the moderator for this conference call. From the management side, we have with us Srimati Ragini Advani, Director Finance, Mr. Alin Roy Choudhury, CGM Finance and CFO, Mr. Ramkumar Goel, GM Finance, Mr. Sachin Garg, DGM and Investor Relations. Please note that this conference call is being recorded. At this moment, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. At that time, if you have a question, please press star and one on your telephone keypad. I would like to remind you that some of the statements that will be made in today's discussion may be forward-looking in nature. It is subject to several risks and uncertainties, and the actual results could materially differ.
I would now like to hand the conference over to Ragini Adwani, Director Finance, for the opening remarks, after which we will have the forum open for the interactive Q&A session. Thank you, and over to you, ma'am.
Thank you. Thank you so much, Bhumika. Good afternoon, everyone. I'm Ragini Adwani, Director Finance at Ircon. I apologize. Earlier, CMD sir was scheduled to join this call, but a last-minute visit has taken place in one of our projects for some senior-level review by the Ministry of Railways. Therefore, he also was required to personally attend the project site. On behalf of my team, I extend a very warm welcome to all of you, and thank you for your presence today at the Ircon's earning call for Q2 and H1 FY26. Although this quarter has been challenging for the company, we have been striving hard to sustain and improve our performance. Financial results, as well as presentation, have already been uploaded on the stock exchanges. I'm sure that all of you have had the opportunity to review these documents.
Let me briefly give you a snapshot of our financial performance for Q2 FY26. The company has reported a total revenue of INR 2,112 crore, a PAT of INR 137 crore, and a core EBITDA of INR 162 crore in Q2 FY26. Earnings per share stands at INR 1.47 per equity share in Q2 FY26 on a half-yearly basis, and this is on a face value of INR 2 per share. Order book of the company stood at INR 23,865 crore as of 30 September 2025. About 63% was from competition and balance from nomination, and about 91% of our order book is relating to domestic projects and the balance international. Ircon has 11 subsidiaries and 7 joint venture companies, including a renewable power company. Now, without taking much time, I would like to open the floor for a Q&A session. Thank you.
Thank you, ma'am. We will now begin the question-and-answer session. To ask a question, please press star and one on your telephone. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Gaurav Jagirdar, an investor. Please go ahead.
Good afternoon, ma'am. Thank you for taking my question. I had two, three questions which I'd like to get answered. One was the other income has come down. Any specific reason for this, ma'am?
You're talking on other income on a consolidated basis?
Yes, yes, ma'am.
Other income has actually gone up?
My apologies. On the standalone, I was talking about.
Even in standalone, it has gone up.
Okay. Other income, yes.
Yes.
Okay. My bad. Ma'am, share from the profit sharing from the JVs. Can you share some light on it? How will it be going forward?
In our joint venture companies, we have one of our highway projects. It's called Ircon Soma Tollway Limited. That has been giving us profits. Going forward, this should be ending, the concession period is ending next year, but this has been giving us good profits over the past few years and is expected to do so for the current financial year as well. We have some coal joint venture companies in which CERL One, which is one of the coal connectivity projects, that is only operational as of now. The balance are all under construction. In CERL phase one, there have been losses, and we expect it to break even by the year or two years later.
Right now, this project is undergoing losses, and the reason for that is that while our track is ready mainly, but the mines which had to come up around that area, some of them have come up, some of them have not come up. There is a per line that we are going to be ready with by the end of this financial year, after which there should be traffic enhancement. For it to break even, it will take another, let's say, about 18-20 months. That is about the coal JVs. We also have another joint venture company which is IRSDC, Indian Railway Station Development Corporation. That is under closure. We are at the final leg now where we are in the process of appointing a liquidator for that company.
We shall be getting back our investment again, spread over a period of time, but maybe a significant amount should come back to us by about the beginning of next year.
Okay. Thank you. Thank you so much. My another question is we are doing quite well on the international front. We will be maintaining the same margins, or are they poised to go upwards from here?
On the international front, while we definitely have better margins, also the foreign exchange has played its own, it's given us a benefit, as we are all aware about the rupee depreciation that's been happening. Therefore, we've had good foreign exchange earnings in this year. One of our projects, which is in Bangladesh, Khulna Mongla, we have had roughly about INR 20 crore of realized foreign exchange earnings from there because of the exchange rate differences.
Got it, ma'am. What will be the split, ma'am, between domestic and international projects?
From a turnover perspective, it's as much as 96% to 4% when it comes to turnover. From an order book perspective, we have an international order book of about 10%.
Okay. Thank you. Thank you, ma'am. That's it from my side.
Okay. Thank you so much.
Thank you.
Thank you. The next question comes from the line of Shreyans Mehta from Equirus. Please go ahead.
Yeah, thank you for the opportunity. My first question is on the margin front. Is there any specific reason why the margin is dented in this quarter, and how should one look at the full year for FY 2026 and FY 2027?
Yes, margins have taken a dent. We have had a series of reasons. One, of course, has been that, as I mentioned, that in CERL, we have been continuously having losses on a consolidated level, which has resulted in our reduction in income. Also, on a consolidated basis, we have had some adverse impact in our subsidiaries, which are also under construction, but that should get negated or kind of offset by next financial year. That itself has also contributed to our lower margins. Having said that, as I had mentioned in my earlier calls also, we were expecting half to 1% reduction in our margins in terms of our normal projects that we had, and which has been the case. The new projects that we have been winning are on lower margins.
Some of my projects, in fact, two of them, we've had some losses, which we have booked partly in March we had booked, and some more came up, which is what we have reflected in this half-yearly result. All these are the reasons for slightly lower EBITDA margins as well as PBT and PAT. Having said that, we continue to say that our PAT margins going forward will be in the range of 6-7%.
Okay. Got it. Got it.
From a long-term perspective, yeah.
My second question is on order inflow side. How much are we targeting for the full year? My third, the last question on the revenue front is one that is on the lower side. How are we looking at execution for second half and for the full year next year, FY 2027?
Yeah. The first, in terms of order book, we have got orders more than INR 4,000 crore in the first half of this financial year, and we expect something of a similar range going forward. In terms of turnover, yes, our six-month turnover has been slightly on the downside, but it's normally the latter half which picks up. We expect that on a consolidated level, we should be having an operating revenue in the range of about INR 10,000-11,000 crore. For going forward for the next year also, we maintain a similar level, which will be around INR 10,000 crore. Does that answer your question, Shreyans? Hello?
Mr. Shreyans, you are not audible.
Yeah, ma'am. Got it. Got it. Thanks.
Yeah. Thank you.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Vishal from Antique Stock Broking. Please go ahead.
Yeah, ma'am. Thanks for the opportunity. Am I audible?
Yeah, Vishal. Thank you. I can hear you.
Yeah. Okay. Fine, ma'am. Ma'am, one thing which I'm noticing is you mentioned order inflow is INR 4,000-odd crore for staff, but I think it looks like is there a change in the scope of existing work? Because on an implied basis, the order book has seen a good increase on a quarter-to-quarter basis.
Yeah, that's right. There has been some increase in our existing jobs as well.
Okay. Okay. Okay. When you alluded like second half will do inflow, is that fair to understand? The fresh inflow INR 4,000 crore, similarly that we are targeting, or probably some bit of scope change or anything we are further expecting in the second half?
The fresh inflow itself, we are targeting in that range.
Okay. Okay. Got it, ma'am. In terms of our segmental performance, at an international side, though it's a smaller piece, but EBIT level margins are more than 100%. I think you briefly touched there is a forex gain. Can you—I mean, is it the same thing which is coming in the segmental leading to a better margin?
That's right. In international projects anyway, we tend to have higher margins than domestic. Over and above that, we've had foreign exchange gains, the significant one being in our Khulna Mongla Bangladesh project, which has contributed to the significant increase in EBITDA margins of foreign projects.
Okay. Sorry, I think you did mention on the number. What is this one-off number of forex, ma'am?
The overall number, I think, is about INR 30 crore, and out of it, a significant amount, about INR 20 crore, is Khulna Mongla.
Okay. Okay. If we—I mean, take that number off from our reported margins, then it looks like for a domestic project which we are executing, the margins are very weak.
Dropping.
Yeah, it is dropping. Yeah.
As I mentioned, we have about a, on a normal course, we have been taking jobs now at much stiffer margins, and because of which, going forward, there would be a drop of about 1% in my normal execution of projects, which is what you would have seen that our project cost has gone up. Over and above that, we've also had certain losses that we had to book on two of our projects. That should be hopefully one-off items.
Okay. Okay. At a yearly basis, probably the margin compression will be to the extent of maybe 1 percentage points.
Yes. Yes.
Okay. Okay. Can you give some color on in terms of inflow? I think though the order win which was there in last year, actually 2025, from that side, I think first-half numbers are very good. Any changes that we are seeing as the competition has gone down, or are there new segments that we are adding up which is leading to this inflow? Any color that can be provided will be helpful, ma'am.
Yes. While we continue to focus on railways and EPC projects and roads, which has also been our main forte even now, as we mentioned earlier also, we have moved into Kavach as one of the segments. In that, we have been taking certain jobs. Also, we have tried diversifying into certain other areas while picking up the jobs. We have recently taken one particular project in a hydro power project. These are things which we are trying to diversify to understand the nuances of that industry and see if we can get more projects there. The market per se has been very tough for us. There has been a lot of competition. Many of the jobs are being quoted below estimates, which means that even if you were to win a job, the margins get very stiff.
Initially, till about a year before, we were trying to continue getting margins intact, and therefore, we were trying to get our—basically, we were trying to make sure that we do not compromise on the margins. Recently, we've had this change in our attitude, wherein we have—just a second. [Foreign language]
Yeah, sorry. Are you there, Vishal?
Yes, ma'am. Yes, ma'am.
Yeah. I'm so sorry. There was actually an announcement which was happening in our company, so that's why I had to put you on mute. Yeah. I was saying that we've had some change in our course, wherein now we are also going with aggressive margins and trying to get orders. That's why you would see that our first half in this year, we've managed to get orders more than what we had got last year. It does mean that there's been some impact on our margins because that's how the industry is being right now.
Okay. Okay. Okay. In terms of the margins and competition which you mentioned, last year again, I think in your earnings call commenting, you have mentioned competition is there. Is there any concern at even the regulators or maybe the agencies who are calling these bids? I mean, they are awarding the project, I mean, there could be a chance these projects may not see light of the day. Any thought that you're seeing even in terms of roads or maybe any sector, or probably no ministry or maybe any agency, they are not—
Yeah. Yeah. At least in roads, we've been hearing and seeing it in our newspapers as well. There has been a lot of focus on the quality, and there have been repeated messages from NHAI as well as from the Ministry saying that quality matters, and they're going to go stiffer in terms of the contractors who are not performing or whose quality is not up to the mark. They are actually working on that side and taking some actions, except that we'll get to know that over a period of time. I'm sure something similar would also be taken up in railways, but it may take some time. We are also waiting for that to happen.
Okay. Okay. Got it. Got it. I think that's all from my side, and thank you for the detailed explanation.
Thank you. Thank you. Thanks. Bye.
Thank you. A reminder to all the participants that you may press star and one to ask a question. Once again, a reminder to all the participants that you may press star and one to ask a question. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for their closing comments.
Thank you. Thank you, Ms. Bhumika, for moderating the call. I would like to thank all our stakeholders, shareholders, business partners, analysts, investor friends who have shown continued support and faith on us. We would also be happy to connect with you on a one-to-one basis as and when required and for any further queries that you may have. Thank you all, please, for your participation. Thank you.
Thank you all for being part of this conference call. If you need any further information or clarification, you may contact Mr. Sachin Garg or email at sachin.garg@ircon.org. Thank you for joining us, and you may now disconnect your lines. Thank you.