SRM Contractors Limited - A niche Infra player

[Snowman]

Q2 FY26 Concall Highlights

Key Business Highlights

• SRM Contractors is an EPC contractor which specializes in avalanche protection, RE Wall, Hill slope soil stabilization, tunnel widening, bridge, tunnels, roads, etc.

• Revenue contribution from road is 48% and slope stabilization is 52%.

• According to management they only focus on high margin center projects. And avoid state projects.

• State projects usually have delayed payment problem, which is not present in center projects.

• They are also expanding into North East region in collaboration with BRO.

• SRM is doing a capex of 70cr out of which 48cr of capex has already been completed in H1 FY26.

• Order book
  

  

• SRM 2 years back was limited to J&K, Himachal Pradesh, Uttarakhand, etc with 200 odd cr of order book . Today they have expanded to Maharashtra, Gujarat, Orissa, etc, with order book now stands at 1552.65cr.

Acquisition

• SRM has already acquired Maccaferri Infrastructure Private Limited (MIPL) in Q1 FY26.

• According to management due some technical glitch the share were not showing in Demat. Therefore, have not reported back then.

• From Q3 MIPL’s revenue will be consolidated in SRM results.

• MIPL business operation is related to slope stabilization which is very similar to SRM. The margin profile are also same.

• MIPL is an Indian subsidiary of parent, Officine Maccaferri, Italy. Their business model is very simple.

• Officine Maccaferi Italy is a construction material supplier and has presence in 100+ countries. In some countries they have subsidiaries which execute project in local level.

• SRM is doing a strategic partnership with Maccaferi Italy. Therefore, wherever Maccaferi Italy does not have local presence. SRM will be there local project executor in that country.

• This partnership will give SRM global presence. SRM has already established their office in Uganda and UAE. But can take 1-2 years to become significant.

• This collaboration brings SRM three key advantages. Firstly, improved road stabilization and reinforcement through cutting-edge geosynthetic technologies that enhance load-bearing
  capacity and durability. Second, access and ability to bid for global infrastructure projects.
  And thirdly, sustainable cost-efficient construction solutions that optimize resource use and
  ensure long-term infrastructure resilience.

Guidance

• Management is guiding revenue of 800-1000cr from SRM and 300-400cr from MIPL for FY26.

• Order book can grow to 2000+cr in 2026.

[Snowman]

Ok sets of numbers from the company

Disc - Invested and biased

[Prabhat_Mohanty]

Sorry to differ with your view that result is ok. In my opinion result is very good. When most of the construction companies have reported decline in profit( except LT), SRM has shown increase in profit both qoq
and yoy. Comparing figures as of 31.12.2024 and 30.09.2025 with current set of numbers, one cannot buy appreciate the performance. Waiting for management comments, to act upon my opinion.

[Bornwinner_16]

It’s look good on YOY basis but couldn’t deliver what they had indicated.
Management stated around 350-400 run rate but deliver only ~230
PFA: Attachment from Q2 con call

[Snowman]

That was my thought process also. I was expecting greater contribution from MIPL than what was delivered.

They have spent 76cr on acquiring MIPL which is kind of a big number for such a small company like SRM.

On standalone basis both rev and pat growth is approx 37%, whereas consolidated basis it is 54%. Therefore the impact of MIPL is not much.

In share market over promising and under delivering is the biggest crime a management can commit.

Let see what the management has to say in Q3 concall.

Disc - Invested and biased

[Vaqzy]

SRM secured Package 6 for MSIDC Nashik being the lowest bidder with 483cr, It also bidded for Package 3 which is now secured by Afcon Infrastructure by being the lowest bidder at 433cr