Cube Highways Trust has released the transcript of its Q1FY27 investor conference call held on Monday, August 17, 2026. The call discussed the financial performance for the quarter ended June 30, 2026, marking the first quarter reported as a publicly listed InvIT following its transition via a ₹5,000 crore Offer for Sale in July 2026.

The portfolio delivered strong operating results, with toll revenue growing 11.5% year-on-year to reach total consolidated income of ₹1,157 crore. Traffic volumes rose 9.3% YoY, supported by broad-based growth across major assets. Consequently, the Board of the Investment Manager approved an upward revision of full-year FY27 Distribution Per Unit (DPU) guidance to ₹14.50 per unit, from the previous estimate of ₹14.00.

Financial Performance

Revenue from operations stood at ₹1,127 crore, up 19.3% YoY. EBITDA for the quarter rose approximately 16.7% YoY to ₹819 crore. Average Daily Collection was ₹10.1 crore, with Electronic Toll Collection (ETC) stable at 97.1%.

Net Debt stood at ₹17,645 crore, with Net Debt/AUM at 45.17%. Assets Under Management (AUM) remained stable at ₹367 billion. The weighted average cost of debt improved to 7.49%, supported by the issuance of fixed-rate instruments. NAV increased to ₹149.6 per unit from ₹145.8 in the previous quarter.

Operational Updates

The portfolio comprises 27 road assets across 12 states and one Union Territory, covering 8,754 lane kilometres. The mix includes 18 toll, 6 HAM, and 3 annuity projects, with an average residual concession life of 17.8 years.

Key operational highlights include:

• Traffic Growth: Passenger traffic benefited from longer trip lengths and Annual Pass adoption, which averaged 32% across the portfolio. Compensation for Annual Passes recognized as received/receivable was ₹108 crore as of June 30, 2026.
• Acquisitions: Conditions Precedent for two assets (CNTL and DTPL) are complete. Unitholder approvals for preferential issuance for four assets are expected by late August or early September 2026.
• Maintenance: Major maintenance at NAMEPL and DATRPL is progressing within budget. Micro-fine milling deployment saved approximately 2,250 MT of bitumen and 32,000 MT of aggregates.

Distribution and Tax Updates

The Trust generated NDCF of ₹532 crore in Q1FY27, distributing ₹531 crore (99.8% of NDCF). The distribution mix consisted of 53% interest, 27% dividends, 19% return of capital through SPV loan repayment, and treasury income.

Management highlighted the impact of the Taxation and Other Laws (Amendment) Bill, 2026. While the surcharge on SPVs opting for the new tax regime increases from 10% to 25% (raising effective tax rate to 28.6%), dividends distributed to unitholders will now be tax-exempt. Management expects this to improve post-tax returns for taxable investors, who constitute a large share of the base, as the dividend component of distributions is expected to increase over time.

What the Numbers Show

The significant divergence between the 19.3% revenue growth and 11.5% toll revenue growth indicates that non-toll income or other operational revenues contributed materially to the top-line expansion. Additionally, the sharp 57% YoY jump in NDCF, outpacing the 11.5% toll revenue growth, suggests improved cash conversion efficiency or favorable timing of annuity receipts, which totaled ₹449 crore in the quarter.

Call Details

The audio transcript of the call is available on the company website under Financial Results > Results > Current Year > Q1 > Investor Call Transcript (Audio). The call was moderated by DAM Capital Advisors Limited.

Cube Highways Trust reported robust operational performance for the first quarter of FY27, with operating revenue rising 19.3% year-on-year to ₹11,266 crore. The growth was underpinned by a 9.3% increase in portfolio traffic and an 11.5% rise in toll revenue, driven by improved macroeconomic conditions and higher passenger vehicle adoption of the Annual FASTag Pass scheme.

The InvIT declared a distribution of ₹3.95 per unit for the quarter, totaling ₹5,309 crore in payouts. This reflects the trust’s ability to maintain consistent unitholder returns despite the expiry of the WUPTPL concession in June 2026, which reduced operational days for that asset. The total consolidated income stood at ₹11,568 crore, including annuity receipts and other income streams.

Operating Performance

Toll revenue from the 18 tolled assets grew by 11.5% to ₹9,180.6 crore, excluding annuity and HAM assets. The growth was led by key SPVs such as GAEPL (30% YoY), DATRPL (12.7%), and NAMEPL (14.9%). The portfolio benefited from the Annual Pass compensation of ₹1,081 crore, recognized as receivables or received from NHAI. On a comparable basis, adjusting for the reduced operational days of WUPTPL, toll revenue growth would have been 12.0% YoY.

All six annuity payments due for Q1FY27, amounting to ₹4,541 crore, were received on time. The trust continues to hold a diversified mix of BOT/DBFOT, TOT, HAM, and annuity assets, providing stability through contracted cash flows alongside growth-oriented toll revenues.

Financial Position and Debt

As of June 30, 2026, Cube Highways Trust maintained a net debt-to-AUM ratio of 45.17%, indicating adequate headroom for future acquisitions. The average cost of debt stood at 7.49%, with a Debt Service Coverage Ratio (DSCR) of 2.0x for the trailing 12 months. The trust issued ₹6,370 crore worth of Non-Convertible Debentures (NCDs) in Q1FY27 at a coupon rate of 7.39%, maturing in March 2038.

The enterprise value of the 27-asset portfolio was valued at ₹366,593 crore, with an equity value of ₹201,016 crore. The Net Asset Value (NAV) per unit was calculated at ₹149.56. The balance sheet includes ₹10,878 crore in cash and equivalents against gross borrowings of ₹176,454 crore.

What the Numbers Show

A significant portion of the revenue growth is attributable to non-toll sources. While toll revenue grew by 11.5%, overall operating revenue surged by 19.3%. This divergence highlights the material contribution of annuity receipts and other income, which together accounted for approximately ₹2,085 crore of the total operating revenue. The recognition of ₹1,081 crore in Annual Pass compensation further underscores the impact of government-linked schemes on top-line visibility, reducing reliance solely on variable traffic volumes.

Strategic Updates

Cube Highways Trust is progressing with the acquisition of four committed assets—BFHL, WMTPL, DTPL, and CNTL—via equity swap. Share purchase agreements were executed on July 13, 2026, subject to remaining regulatory approvals. The trust also completed its transition to a public InvIT, having successfully closed an Offer for Sale of ₹50,000 crore with strong institutional participation.

Operational efficiency initiatives include the installation of rooftop solar PV systems at three additional assets, bringing total capacity to ~770 kWp, and the use of AI-enabled pothole identification for proactive maintenance. Major maintenance works at WUPTPL were completed within budget, while NAMEPL’s maintenance is ongoing as scheduled.