The Rajasthan High Court has dismissed a writ petition filed by GR Infraprojects subsidiary Nagaur Mukundgarh Highways Private Limited, rejecting its challenge to the levy of Goods and Services Tax (GST) on annuity payments received under concession agreements.

The judgment, dated August 17, 2026 and received by the company on August 18, 2026, pertains to a dispute involving an aggregate amount of approximately Rs 69.79 crore. The subsidiary had challenged the applicability of CBIC Circular No. 150/06/2021-GST, issued on June 17, 2021, before the Hon’ble High Court of Judicature for Rajasthan at Jodhpur.

Legal Developments and Next Steps

GR Infraprojects disclosed the development in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with SEBI Master Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026.

The company stated it is evaluating the judgment and assessing appropriate legal remedies in consultation with its legal advisors. No settlement details were provided, as the proceedings remain active.

What the Numbers Show

The dismissal of the petition exposes the infrastructure developer to potential tax liabilities totaling Rs 69.79 crore. This figure represents the aggregate amount involved in the litigation challenging the GST circular's applicability to annuity income. The outcome shifts the financial risk from a disputed regulatory interpretation to a likely liability or further appellate cost, depending on the company's decision to appeal.

Gr Infraprojects has received a confirmed work order valued at ₹91.6 crore from Varanasi MMLP Limited for the development, operation, and maintenance of the Multi Modal Logistics Park (MMLP) in Varanasi, Uttar Pradesh. The project is structured on a Design, Build, Finance, Operate and Transfer (DBFOT) public-private partnership model, with a construction period of one year followed by a 45-year concession period.

Order in Financial Context

The ₹91.6 crore order represents approximately 3.80% of the company's average quarterly revenue of Rs 2,401.57 crore. While modest in isolation compared to recent mega-highway contracts, it diversifies the portfolio into logistics infrastructure. The total disclosed order book stands at Rs 10,720.79 crore, providing coverage for 4.46 quarters of average revenue. This substantial backlog underscores the scale of upcoming execution opportunities.

Company Order Track Record

Order inflow velocity has decelerated sequentially from Q1FY27 to Q2FY27, though the absolute values remain significant. The current order is consistent with smaller ancillary projects, contrasting with the multi-thousand-crore highway awards seen earlier in the fiscal year. The table below summarises recent quarterly order inflows:

Execution and Revenue Quality

Revenue has shown a clear upward trajectory over the last three quarters, rising from Rs 2,399.10 crore in Q3FY26 to Rs 2,944.70 crore in Q1FY27. Operating profit margins have stabilised around 16-20%, with Q1FY27 reporting an OPM of 16.80%. No quarters reported net losses, indicating stable execution quality despite margin compression in Q4FY26. The following table captures recent quarterly financial performance:

Revenue Growth, Order Wins Translating to Revenue

As Gr Infraprojects has sustained order wins, with massive inflows in Q1FY27, its annual revenue has grown from Rs 7,590.10 crore in FY25 to Rs 8,527.30 crore in FY26, representing a year-on-year growth of 12.30% based on the latest annual data. This demonstrates that past order books are successfully converting into top-line growth.

Working Capital and Execution Capacity

The balance sheet remains strong with a current ratio of 3.54x and Total Liabilities/Equity of 0.71x, indicating ample liquidity to fund operations. However, operating cashflow was negative at -Rs 2,811.50 crore in FY26, reflecting the capital-intensive nature of infrastructure projects where receivables and working capital cycles are stretched before cash conversion occurs.

Key Observations

• Order book coverage: Book-to-bill of 4.46x; at this level, execution capacity becomes the binding constraint.
• Cash conversion: Operating cashflow of -Rs 2,811.50 crore in FY26 indicates the backlog is not yet converting to cash efficiently, with receivables or working capital cycles potentially stretched.
• Margin watch: OPM has ranged between 14.73% and 20.28% across recent quarters; the shift in project mix toward logistics and power may influence future margin trends.
• Client concentration: National Highways Authority of India and Ntpc limited dominate recent order history, making dependency on these entities a factor to monitor.