IRCON - IRCON International Ltd Share Price

Ircon International Limited's management provided several key insights during the Q2 and H1 FY26 Analyst Conference Call held on November 13, 2025.

For Q2 FY26, the company reported total revenue of Rs. 2,112 crore, a PAT of Rs. 137 crore, and core EBITDA of Rs. 162 crore. The earnings per share for the quarter stood at Rs. 1.47 on a face value of Rs. 2. The total order book as of September 30, 2025, was Rs. 23,865 crore, with 63% derived from competitive bids and 91% related to domestic projects.

Management indicated that although the quarter was challenging, they are working hard to sustain and improve performance. They expect the order inflow for the full year to be approximately Rs. 4,000 crore, similar to the first half's performance. They project total operating revenue in the range of Rs. 10,000 crore to Rs. 11,000 crore for FY26, maintaining a similar outlook for FY27.

The guidance for PAT margins is estimated at 6% to 7% for the future. The reduction in margins was attributed to losses from joint ventures and the competitive pricing environment, causing a slight dent. Management acknowledged that new project wins are at lower margins, partially impacting overall profitability.

Regarding international projects, management confirmed that while they have achieved better margins, the foreign exchange earnings, particularly from a project in Bangladesh, contributed positively. They noted a FOREX gain of about Rs. 30 crore, with Rs. 20 crore specifically from the Khulna-Mongla project.

Overall, management underscored their focus on diversifying their project portfolio into areas like hydro power, alongside their established rail and road projects, to adapt to the current competitive landscape.

1. Question: "One was the other income has come down. Any specific reason for this ma'am?"
   Answer: "Actually, the other income has gone up both on a consolidated and standalone basis, contrary to what may have been perceived. I apologize for any confusion earlier."

2. Question: "Can you share some light on the share from the profit-sharing from the JVs, and how will it be going forward?"
   Answer: "Our JV with Ircon-Soma Tollway has been profitable, but its concession ends next year. In coal JVs, CERL1 is incurring losses but is expected to break even in about 18 to 20 months as we enhance traffic with the completion of the spur line. We also have IRFDC under closure, from which we expect to recover investments early next year."

3. Question: "We are doing quite well on the international front. Will we maintain the same margins or are they poised to go upwards?"
   Answer: "Currently, our international margins are better due to forex gains, especially from our project in Bangladesh, which yielded around Rs. 20 crores in forex earnings. We expect these margins to be stable, influenced by the ongoing forex situation."

4. Question: "Any specific reason why the margin is dented this quarter and how should we look at the full year for FY'26 and FY'27?"
   Answer: "Margins dipped due to losses from CERL. Consolidated impacts from under-construction subsidiaries also affected us. We anticipated a reduction of 0.5% in our margins overall for normal projects, and we still expect PAT margins to fall between 6% to 7% moving forward."

5. Question: "What are we targeting for order inflow for the full year?"
   Answer: "In the first half, we secured over Rs. 4,000 crores worth of orders and expect to maintain a similar inflow in the second half. We foresee an operating revenue of about Rs. 10,000 to Rs. 11,000 crores for the year."

6. Question: "Is there a change in the scope of existing work affecting the order book?"
   Answer: "Yes, there has been an increase in existing jobs contributing to the order book's growth. We target fresh inflows in the range of Rs. 4,000 crores, similar to our past performances."

7. Question: "Could you give some insight into segmental performance? Are forex gains mainly driving international EBIT margins?"
   Answer: "Indeed, international projects typically yield higher margins. Additionally, we've seen significant forex earnings, particularly from our Khulna-Mongla project, contributing to our robust international segment margins."

8. Question: "What is the one-off forex contribution to the reported margins?"
   Answer: "The overall forex gain is around Rs. 30 crores, with approximately Rs. 20 crores stemming from our Khulna-Mongla project. If excluded, domestic project margins would appear weaker than reported."