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Desco Infratech FY26 Earnings Concall Highlights: 👉 FY27 & Future Outlook: 💠Revenue growth: Management guided 70-80% YoY growth (conservative) for the next 2-3 years on the back of CGD execution, power/solar diversification, and CBG ramp-up. 💠Long-term target: ₹1,000 Cr revenue by FY2030 (5-year horizon). CGD (including CBG) expected to contribute 60-65% of revenue; balance from power distribution & solar EPC. 💠CBG-specific outlook: First 2 TPD plant commissioning in Q1 FY27 (revenue potential ~₹5 Cr p.a. at full utilisation). 💠Additional expansion to 15-20 TPD capacity targeted in next 18 months (Gujarat + Madhya Pradesh). 💠CBG revenue expected to reach ~₹170 Cr by FY2030. 👉Margins: CGD PAT margin stable at ~15.4%. Power & Renewable EPC at ~10%. Overall PAT margins sustainable at current levels with direction “stable to improving” due to better project mix, cost control, and higher-margin CBG contribution (PAT margin 22-23%). 💠Break-even on initial CBG plant expected in 18-20 months 💠Cash flow: Operating cash flow to turn positive within 1-2 years (already improving from last year despite 100% revenue growth). 💠Negative cash flow in FY26 was purely growth-driven (working capital deployment), not liquidity stress. 👉 Current Order Book / Projects and Future Pipeline: 💠Order book: ₹345+ Cr 💠 CGD: ~₹330-332 Cr (EPC timeline 18-24 months; O&M ~₹35-40 Cr over 24 months). 💠Power distribution: Balance portion (average timeline ~1 year). 💠Tender pipeline: ₹650 Cr (CGD ~₹470-480 Cr + solar/power ~₹100 Cr). Expected to convert quickly once Middle East-related delays ease; management sees this as a major order-book booster. 💠Execution focus: CGD pipeline execution continues. Power & solar EPC contributed meaningfully in H2 FY26 due to seasonal execution tailwinds (post-monsoon ROW clearances). 💠CGD remains core (83.24 Cr revenue in FY26). 👉CBG projects: 💠2 TPD commissioning in Q1 FY27 (capex ₹3.5-4 Cr already incurred). 💠SGAEPL (75-76% stake acquired) to add 5 TPD capacity; ready government approvals accelerate rollout. 💠Further 15-20 TPD greenfield via Desco BioGreen Pvt Ltd (total capex ~₹25 Cr planned; funded via bank debt/greenfield financing). 👉 Other Notable Points: 💠FY26 Financials: Revenue ₹118.79 Cr (+99.28% YoY), EBIT ₹23.43 Cr (+76.3%), PAT ₹16.38 Cr (+80.87%), Net Worth ₹70.85 Cr (+20.3%), Debt/Equity stable at 0.20x, EPS ₹21.34. 💠Segment performance: CGD (70% of revenue) delivered healthy 15.42% PAT margin; new Power & Renewable EPC segment (30%) at 10.01% PAT but offers superior 10-15 day cash conversion cycle vs 30-35 days in CGD — strategic move for working-capital efficiency. 👉Debt & capital allocation: Unsecured NBFC borrowings (short-term, 15-17% cost) taken mainly for solar projects (90-120 days tenure). Plan to restructure post-H1 FY27 to 8.5-9.5% via banks and repay via internal accruals. No aggressive leverage. 👉Strategic initiatives: 💠SGAEPL acquisition → instant regulatory approvals + CBG entry. 💠Desco BioGreen Pvt Ltd (WOS) → dedicated green energy platform. 💠DESCO GLOBAL FZ-LLC (UAE) → international EPC push; currently on hold due to Middle East crisis but long-term opportunity in gas infrastructure. 💠Green hydrogen: MOU signed; plans to blend into CGD network once economics improve (solar park required for viability). EPC will be executed in-house. 💠Customer mix (CGD): ~70-72% PSU (BPCL, GAIL, IOCL, IGL etc.), 28-30% private blue-chips (Torrent Gas, Adani Total Gas). 💠Raw material & bidding discipline: Private clients often provide free-issue material; PSUs require full supply by company. Management committed to margin discipline — selective bidding only; rejected low-margin work during recent crisis-driven demand surge ——— 🔗 https://t.co/Sto1a1qHIQ ——— #SMEGems #SME #DescoInfratech #Desco #SME