Ladies and gentlemen, good day and welcome to the Rail Vikas Nigam Limited Q2 FY 2026 Earnings Conference Call. Please note, this call is for 40 minutes. As a reminder, all participant lines will be in a 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 over the call for the introduction of the RVNL management.
Yeah, good afternoon, everyone. RVNL management team is led by Mr. S.C. Jain, who is the Chairman and Managing Director, Mrs. Anupam Ban , who is Director Personnel, Mr. M.P. Singh, who is Director Operations, Mr. Abhishek Kumar, Director Finance, and accompanied with him is Mr. Chandan Kumar Varma, who is Chief Financial Officer at RVNL. I'll hand over the call to management for the opening remarks, and then we'll have lines for Q&A. Thank you, and over to you, sir.
Good afternoon, everybody. I welcome all the investors on behalf of RVNL management. RVNL, in the quarter two, has done improvement as compared to the previous quarters. As compared to the last year, also the same quarter, RVNL has shown better results. As far as RVNL's business plan is concerned, RVNL is steadily progressing in its chartered path. The progress of the projects on our traditional legacy railway projects, some of the flagship projects of Rishikesh, Karnaprayag, Pamban, Bilaspur, metro projects in Kolkata is going on very well. Simultaneously, we are focusing on our projects which we have won through bidding in various sectors. The progress is very good on the projects. Simultaneously, the new businesses are also being acquired in various sectors.
We are also exploring business opportunities in some of the sunrise sectors like solar with battery storage systems, operation and maintenance of the rolling stock, where a lot of opportunities are coming not only from Indian Railways, but also from various metro systems in the country. We are also exploring business opportunities abroad. Some of the flagship projects like harbor projects in Maldives are also progressing very well. We are quite hopeful that we will be able to maintain our stream in the balance period of this financial year. Also, the order book which is with us, is provides us a stable revenue guidance for the next two to three years. At the current pace of business acquisition, we are very sure to maintain a steady business in the coming financial years.
We hope to sustain the revenue guidance, what we have projected during the start of the financial year. As far as total orders are concerned with RVNL, the legacy orders which are from the Indian Railways are to the extent of INR 43,000 crores. The balance orders which we have won through bidding are of an order of INR 46,000 crores. The total order book is in excess of around INR 90,000 crores at present with RVNL.
Along with this, we are also exploring some of the steady revenue streams which will provide us revenue on a long-term basis also. L ike we have entered into multimodal logistic park sectors in collaboration with the National Highways Logistic Management Limited. The four multimodal logistic parks are already in the process of operationalization. We are also bidding through some of the HAM projects, where the revenue is steady for the next 20-25 years of the transition period. We are quite hopeful that RVNL is on its path of progress. We assure on behalf of RVNL management to the investors that RVNL will keep its hands steady and will progress on this path. Thank you.
Nishant, Nishant?
Can we open the floor for Q&A now?
Yes, please.
Thank you. 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. The first question is from the line of Raja Gopal, an individual investor. Please go ahead.
Hello, sir. You said that the total order book is INR 90,000 crores, which comprises legacy orders of INR 43,000 crore and balance INR 46,000 crore. Is that correct, the current order book?
Yeah.
Current order book?
You heard rightly. The order book from our legacy railway projects is of order of around INR 43,000 crore. The projects which we have won through bidding in various sectors is around INR 46,000 crores. [crosstalk] around INR 89,000 something, roughly [crosstalk] crore. S ome of the RVNL is in process of regularly acquiring orders. Recently also, we acquired two orders. This is a dynamic figure, but roughly it is in this order only.
This is as of September 30 or as of today?
It is on September 30th.
Okay. Thank you very much, sir. Thank you.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Shubham Shelar from Antique Stock Broking Limited. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. Am I audible? Hello.
Yeah, please. Yeah.
Yeah. Sir, so my question is regarding the order book. Sir, can you provide a sector-wise order book breakup?
Sure.
Different segments [crosstalk].
Yeah. You are concerned about the orders which are from the legacy railway projects or orders which are from [crosstalk]?
[crosstalk] from different railway?
Yeah. As far as our orders which we have won through the market bidding, our roughly 33% contribution is still from the railway projects. They are maybe in the civil engineering sector, electrical or signaling. They are in various parts of the country. The second largest component is from the metro sector. Metro sector comprises of around our 22% order books. The road sector order book is around 10%. Our 12% order book is from basically the BharatNet project, which is one of our largest and flagship projects. Around 10% order is from our share in the Vande Bharat manufacturing. This is largely by [submission] of orders which are currently with us.
Okay, sir. Sir, what was the order inflow in this quarter?
Order?
Order inflow.
Order inflow? Yeah. The total orders in the last quarter, we have received the order of INR 852 crores in the last quarter. In the last six months, we have got the order of INR 2,000 crores.
Okay, sir. Sir, regarding Vande Bharat project, the execution has started?
The Vande Bharat project, the prototype, the scheme of things is like that. The designs, etc., is in various stages of approval. We have started the mock-up. The first prototype, the scheme is that first two prototypes will be produced. They will be tested, and then the regular production will start. The first prototype, as per the scheme, will be coming in June 26th. The second prototype will be coming August 26th. When these prototypes are tested and certified for further production in the balance period of 2026-2027, 12 regular rigs will be produced, followed by 25 rigs every year in the next five years. The total production cycle is of six years.
Okay, sir. S ir, O&M part is also included in this?
O&M part is for the next 35 years.
Okay, sir. [crosstalk].
O&M part will start basically simultaneously because when we produce the first two prototypes and 12 rigs in the financial year 2026-2027, simultaneously, their O&M will also start. For that, three Vande Bharat maintenance sets are part of this scheme. They are also being upgraded to receive these Vande Bharat train sets for maintenance.
Okay, sir. Sir, one last question regarding the margins. Last year, we were making around 4%-5% margins. This year, first, the margins are impacted a little bit. What is the reason for that?
Basically, in this year's turnover, almost 30% turnover has come from the bidding projects. Yes, in legacy projects, we have very good margins. In projects we have owned through competitive bidding, the margins are slightly lower, which we are trying to improve in next quarter. We will basically be working on the design. We are working on the standardization processes, different types of processes. In the future, they are going to give good results. Yes, the margins are lower because of the bidding projects [crosstalk].
[crosstalk]. Okay, sir.
You are not audible.
Sir, am I audible now?
Yes .
Yeah. Sir, one last question regarding, what would be the guidance of revenue for this year?
Yeah. The revenue guidance, which was given in the start of the year, we still maintain that guidance. The quarter two results are quite encouraging as far as the turnover is concerned. Roughly, we are in the same range as the last year, H1. This is the main working season. Now, the next four-five months, they will be giving revenue, which will be accelerated at much faster pace. We maintain the revenue guidance of around INR 21,000-22,000 crore for this financial year.
Okay, sir. Sir, thanks for answering all my questions.
Thank you.
Thank you. A reminder to all, anyone who wishes to ask a question may press star and one. Ladies and gentlemen, you may press star and one to ask a question. We will wait for some time for members to ask the questions. The next question is from the line of Abhishek Kumar Leekha from Nest Wealth LLP. Please go ahead [crosstalk].
Yeah. Hi. Thank you for the opportunity. Just want to understand, how can we have more value-added revenue line which can have higher EBITDA lines in future? T he current EBITDA lines are not very adequate.
[crosstalk]. Yeah. The present revenue line and growth of the company is aligned to the larger ecosystem of infrastructure projects, wherein in line with government's policy, wherein direct nomination work for infrastructure has been prohibited from being directly allotted to PSU. We are aligning our business strategies and developing our product profile in a manner that it goes beyond railway projects. Broadly, it is aligned to that. If you see the numbers, it is reflecting that trend. Even if the revenue from operations remained the same, the mix has changed. It is aligned to the industry standards in general. Going forward, we are confident of maintaining the EBITDA line on the best of the industry standards, as well as it will be as per our guidance later.
Okay. Thank you for the opportunity.
Thank you. The next question is from the line of Bharani V. from Avendus Spark . Please go ahead.
Yeah, g ood evening. Am I audible?
Yes.
Sir, I just missed this number. What was our order inflow for the first half of this year?
[crosstalk]. The order inflow for this financial year in the H1 is around INR 2,000 crore. It is having a mix of every sector, be it electrical, railways, metro or in the signaling. Also, we have won contracts basically from the railway sector for upgradation of signaling systems.
What is our expectation for order inflow for the full year in April 2026?
2026, o kay. Actually, the order inflow is very much dependent on the competition in the market. We are quite hopeful. I n the current financial year, our bidding will be in the range of around INR 75,000 crore-INR 80,000 crore. Considering our success rate of 10%-12%, we hope that the order inflow for this year is likely to touch around INR 8,000 crore-INR 10,000 crore.
Okay. What was this full year order inflow in April 2025?
2024-2025, you are talking about? Yeah, t he last year, because we had some big order builds in the last financial year, t he net order flow for the last year was around INR 18,000 crores.
Okay. What would be our EBITDA margin on full year and for also FY 2027?
Please, can you repeat the question?
What would be our EBITDA margin expectation for this FY 2026 full year and also for FY 2027?
2027, o kay. Right now, we cannot predict exactly, but we hope to maintain the momentum. Our EBITDA margin will be in the range of whatever the industry standard for the infrastructure industry, t hat is roughly in the range of 4%-5%.
Okay. If I see our cash flow generation for the first half, I see operating cash flow has turned negative for the first half. There is a large negative cash outflow in the line item called other financial assets. What is the nature of this cash outflow?
[crosstalk]. Yeah. Basically, this is on account of reduction in unbilled revenue.
Okay. S orry, I didn't hear you properly.
Yeah. At each reporting date, we calculate the contracts for which the project has been made, but the [amount invoiced] has not been raised to clients. T hat varies from quarter to quarter. This current asset difference is only mainly on account of debt only.
Okay. What would be the net working capital days at the end of September? Like core networking, which is receivable days plus inventory days less payable days?
Basically, payments are linked to milestones. On completion of each milestone, we begin the payment. [crosstalk] Now the working season has started. Actually, the early season was a lean season for construction business. Now the construction has started in full swing. We were hopeful that the revenue, this cash flow, will improve from 15th of December.
Okay. With a large order book of around INR 90,000 crores, what is the average execution period for this INR 90,000 crores? Can we expect this to be executed over the next three years or two years? How is it?
Yeah. I'll tell you, t hese projects are of varied nature. Some of the projects, they will be continuing for the next three to four years. Some of the projects are shorter gestation period projects. They will be completing in next one year or next two years' time also. On average, you can consider this order book, considering our growth trajectory is adequate for the next four years' time.
Okay. The growth expected in execution in FY 2027 will also be, say, around 10%?
Yeah. We hope to maintain this in the coming financial years. Obviously, if the company has to grow, this growth trajectory has to be maintained. In this financial year, we will be closing our revenue at around INR 20,000 crore-INR 22,000 crore. Certainly, we will make an effort to increase it by at least 10% in the financial year 2026-2027. In addition to that, we are getting new projects also. Some of the projects have a lesser gestation period.
Getting the new order and executing them in a shorter period will also give me the momentum, and the better turnover of the company. Getting the INR 90,000 crore order book, getting new orders, and getting them completed in a faster way is also the motto of the company. This order book will keep on changing. We will keep on performing and giving the engineering value to our projects, monitoring and getting much better output and outlook to the company. This is our aim for the future.
Okay, s ure. Thank you so much.
Thank you. The next question is from the line of Vishal Periwal from Antique Stock Broking Limited. Please go ahead.
[crosstalk] opportunity. In this time, we are seeing [crosstalk].
Sorry to interrupt , sir. Your voice is breaking.
[crosstalk]. Yeah. Is this better now?
Yes, sir. Please go ahead.
Yeah, [crosstalk].
Yeah. Sorry, sir. I was saying, sir, in terms of previously, the historical tax rate has been in the range of 25-odd percent. This time, we are seeing a line item of deferred tax also. How do you see and what is the reason of this deferred tax? Will this be a continuous phenomena, and is there anything that you can provide?
Yeah, t hat's a very pertinent question. First thing, sir, no, it's not a continuous phenomenon. We don't expect any further increase in the deferred tax. As you know, on each quarter end, this is basically a timing difference thing, a timing difference between the Income Tax Act and what has been done in the [crosstalk] . There was an issue realized that this period coincides with the tax audit. During the tax audit , we realized that one of our exemptions needs to be updated. That hasn't been done. Moreover, if you see deferred tax, moreover, it will be all [unknown] because it gets liquidated in the future period. To your question, very specific, no, we don't see any continuous trend in that. This is the maximum that we expect. As of now, whatever the visibility is there for us.
Thanks. Okay. Sure, sir. I think though, you did clarify on the margin front. I think you did allude that the mix of the order book is changing toward competitive bidding, and that is the reason margins are lower. Is that fair to understand the earlier margins of 5.5%-6% EBITDA margin that we are making? Probably the trajectory will be in the range of now 4%-5%. Will that be a fair understanding to have directionally?
Yeah. As per the order mix, the legacy projects which were on the FX composite management fee model, the margins can be predictable. In case of the projects which we have gone through market bidding, the margins vary across the sector. Some of the sectors having better margins and the larger projects, they are on somewhat not- so- good margins. Now we are changing our strategy also. We are focusing on projects where the margins are better, and we are focusing towards the projects which are on HAM model or other things where the competition is not so high.
Simultaneously, we'll be focusing on projects abroad also, where the margins are certainly better as compared to the domestic projects. In line with the industry standards, the established infrastructure giants, they derive at least 50% of their revenue from the global operations. We hope to substantially improve on our global operations in the coming financial year, so that our revenue margins, we maintain at the range of 5%-6% in future.
Okay, sir. Okay, i n this INR 90,000 crore order book, as of now, is there any international piece in this, sir?
Yeah. International order book is a total of order of around INR 3,200 crores total, out of which some projects are under execution. We are also in the process of bidding or already bidded for many projects in Central Asia, Middle East or East Asia, even East Europe. Certainly, in coming financial year or in this second half of this financial year, we hope to gain substantial traction from the international projects also.
Okay, sir. I think you did clarify on a couple of numbers in terms of inflow. Yes, I think last year was pretty good in terms of inflow. This year, I mean, inflows are a little bit on the lower side, order inflow. If one has to understand the reasoning for the same, is it the competition is high and then the winning trajectory is commensurate to that is lower, or I mean, even the opportunity itself is lower? How do you see things in the market?
No. There is a certain difference that has come to last year. Last year, we won a very large project that was a BharatNet project. Some of the larger projects were also won in the last year. That order flow was of around INR 18,000 crores last year.
This year, other than the competition in the market, what happened, some of the high-value projects, especially in the road sector, the tendering was repeatedly deferred due to various reasons, be it availability of land or other statutory clearances. In coming days, a number of high-value projects are now coming. Our focus is basically on getting the high-value projects where it is a niche sector, and the competition is also not that high. A large number of projects are coming in the tunneling sector, where RVNL maintains a leadership position in the tunneling sector. In coming days, we certainly hope to improve our winning streak in the projects.
Okay, t hen sir, in this road sector as such, we have seen lack of orders. In general, I mean, we have not seen major orders that are getting awarded. I mean, it is not like this quarter- phenomena from last one and a half year. Anything particularly that is the reason that you can share, probably guide us how things are in the road?
No. We cannot comment on the internal dynamics of the road sector, how the different organizations in the road sector, be it NHAI or state PWDs, or other developmental agencies have their own issues because it involves many clearances and many other things. That may be the issue, Vishal. They have changed their strategy also. It was earlier only the EPC, then they changed over to HAM and then they are coming up with a mix of HAM and BOT projects. It is an evolving strategy, and we hope that it will get stabilized.
Got it, sir. Maybe one last thing from me. I think you did mention we'll do almost INR 21,000 crores-INR 22,000 crore kind of execution revenue this year. T his actually implies more like a kind of 10% sort of revenue growth. First half has been quite flattish for us, which means, second half, the number has to be high double digit. Are you seeing almost one and a half months has passed for quarter three? Has the pickup been seen by us or you think probably it will be more like a quarter four phenomena for us?
NO . It is certainly, this quarter, the ongoing quarter Q3, the execution pace has improved substantially, although the monsoon was extended this year in various parts of the country. As you know, the civil engineering projects, they are dependent on the monsoon phenomena. There were some disturbances due to the election. Also, the labor movement gets hampered. The pace has increased. As has been the experience in the previous financial year also, Q3 and Q4, they have substantially improved as compared to Q1 and Q2. We hope that the revenue guidance will be sustainable for this financial year. We certainly hope to not only complete this revenue guidance, but we hope to exceed it also.
Okay. Sure, sir. I think that's pretty helpful. Thank you to RVNL management for answering all the questions in detail. Thank you very much, sir.
[crosstalk]. Sir, your line is unmuted. Please go ahead.
Yes, s orry. Sir, you gave some figures on order inflow. Can you please repeat those numbers? Was the order inflow in Q2 INR 852 crore? Is that correct, INR 852 crore?
Yeah. The order inflow in the current financial year in Q2 is of order of INR 852 crores.
Okay, and t otal in H1 from April to September?
April to February is INR 2,000 crores.
INR 2,000. Sir, one final thing. You mentioned that you gave some total order inflow projection for FY 2026. What was that number, the order inflow for FY 2026 total? What do you anticipate?
It is of order of around INR 8,000 crores-INR 10,000 crores.
INR 8,000 crores-INR 10,000 crores , o kay. All right, t hank you very much, sir. Thank you .
Thank you. The next question is from the line of Ashit Kothi, an individual investor. Please go ahead. Ashit, your line is unmuted. Please proceed with the question.
[crosstalk]
We have lost the line for Ashit. As there are no questions, we would conclude the call now. On behalf of Rail Vikas Nigam Limited, we thank you for joining the call and you may now disconnect your lines.
Thank you very much.