Kalpataru Projects International · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
Outstanding receivables in water business remain in four-digit crore range. While collections improved in January 2026 (Rs 250 crore received) and central budget allocation of Rs 67,000 crore provides visibility, management acknowledged having faced similar hopes in previous quarters without full resolution. Execution speed constrained by cash flow limitations.
Brazil segment reported EBITDA loss of Rs 186 crore and PBT loss of Rs 237 crore in 9M FY26. With legacy order book below Rs 100 crore nearly complete, management is reviewing Brazilian operations' future. These losses have been a dampener on consolidated performance for multiple quarters.
Famu (Fasteners) segment has nearly negligible order backlog. Management explicitly stated they are 'not very optimistic' and the business is 'on a downturn.' Strategic review to conclude in Q4 FY26 with decisions on whether to slow, close, or maintain at nominal level. Total loss funding provided Rs 40 crore in first half.
While aluminum, zinc, and copper are 80-95% hedged, steel cannot be hedged as no forward market exists. Company holds 50,000+ tonnes inventory against total order book of ~300,000 tonnes. Management believes Rs 5,000-7,000 per tonne further increase would not materially impact margins given contingency provisions in tenders, but analyst questions on commodity pass-through in PGCIL contracts (fixed price EPC) highlight execution risk.
