Detailed Coverage

Highway Infrastructure Ltd Receives Stable Credit Rating Amid Revenue Growth

IVR BBB+/Stable Rating Assigned; Order Book Totals ₹1,614.06 Crore

Reader Takeaway: Revenue growth and strengthened balance sheet are positives, but declining margins and toll business risks need monitoring.

What just happened

Infomerics has assigned Highway Infrastructure Limited a long-term credit rating of IVR BBB+/Stable and a short-term rating of IVR A2. The total bank loan facilities rated amount to ₹200.88 crore. As of March 31, 2026, the company's order book stood at ₹1,614.06 crore.

Why this matters

The credit rating provides an independent assessment of the company's financial health and its ability to meet debt obligations. A stable outlook suggests a positive view of its future performance, which can influence investor confidence and borrowing costs. The substantial order book indicates future revenue streams.

The backstory

For FY2026, Highway Infrastructure reported total operating income of ₹612.98 crore, an increase from ₹503.73 crore in FY2025. Net Profit After Tax (PAT) grew to ₹31.81 crore from ₹22.40 crore. However, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) decreased to ₹31.04 crore from ₹39.34 crore in the prior year.

This decline in EBITDA was attributed to higher operating expenses, including increased sub-contracting and site labour costs, leading to a drop in the consolidated EBITDA margin to 5.06% in FY2026 from 7.81% in FY2025.

The company's tangible net worth saw a significant increase to ₹228.18 crore post-IPO in FY2026, up from ₹117.57 crore in FY2025. Overall gearing improved to 0.48x from 0.65x, indicating a stronger balance sheet.

What changes now

With the new credit rating, Highway Infrastructure has a clearer benchmark for its financial standing with rating agencies. The stable outlook provides some reassurance to stakeholders, though the margin pressure and operational risks need to be managed actively.

Risks to watch

A key risk identified is the business model's reliance on short-term toll collection contracts, which are subject to renewal, competition, and traffic volatility. Additionally, a previous rating agency, Brickworks Ratings, lists the company under 'Issuer Not Cooperating' as of June 6, 2026, due to insufficient information for review, raising transparency concerns.

Peer comparison

While specific peer ratings were not provided in the filing, the infrastructure sector, particularly companies involved in toll collection and EPC contracts, often face similar challenges related to project execution costs, contract renewals, and regulatory environments.

Context metrics (time-bound)

• Order Book: ₹1,614.06 crore (as of Mar 31, 2026)
• Total Operating Income: ₹612.98 crore (FY2026)
• PAT: ₹31.81 crore (FY2026)
• EBITDA: ₹31.04 crore (FY2026)
• EBITDA Margin: 5.06% (FY2026)
• Tangible Net Worth: ₹228.18 crore (FY2026)
• Gearing: 0.48x (FY2026)

What to track next

Investors should monitor the company's ability to improve its operating margins, the success rate in renewing toll collection contracts, and any developments concerning information disclosure to rating agencies.