EMS Limited held its earnings conference call for Q3FY26 and nine months ended December 31, 2025, on February 14, 2026, where management addressed disappointing quarterly results and outlined recovery expectations. The infrastructure company, which focuses primarily on water sector projects, faced multiple operational challenges that significantly impacted performance.

Financial Performance Overview

The company's Q3FY26 results fell substantially below expectations, with management acknowledging the disappointing outcome during the earnings call. Key performance indicators showed pressure across margins, with PAT at approximately 10.00% and EBITDA at 15.00%-16.00% for the quarter, significantly below the company's historical performance levels.

Managing Director Ashish Tomar explained that while quarter-on-quarter performance was disappointing, the nine-month PAT of 15.86% remained above the 15.00% threshold, indicating that the poor performance was concentrated in Q3.

Weather Disruptions and Operational Challenges

The primary factor behind the weak performance was weather-related disruptions in Uttarakhand, where the company generates a significant portion of its revenue. CEO H.K. Kansal detailed that Uttarakhand experienced unexpectedly heavy rainfall and natural disasters in Q2, with effects extending into Q3.

Key Impact Areas:

• Approximately 15-20 days of lost work time in Q3FY26
• Extended monsoon conditions requiring repair and revamping of work-in-progress
• Time lost to remobilization efforts after work resumption
• Government prioritization of disaster management over development projects

The company's work involves digging roads and laying pipelines, making it particularly vulnerable to weather disruptions. Management noted that about Rs.800 crores of their work orders come from Uttarakhand, making this state critical to their revenue generation.

Order Book and Project Pipeline

Approximately 50.00% of the current order book was secured in Q2 and Q3FY26, with major projects including:

• Calcutta project: Rs.700 crores
• Fatehpur project: Rs.200 crores
• Ayodhya project: Rs.100 crores
• Agra project: Rs.100 crores

These projects are currently in the design and pre-engineering phase, requiring expenditure on surveys, investigations, and initial procurement without generating billable revenue until execution begins on-site.

Financial Position and Debt Structure

The company's interest costs increased due to a Rs.25 crores loan taken for the HAM project in Mirzapur Ghazipur STPs Pvt. Ltd., a subsidiary of EMS Limited.

Receivables Aging:

• Less than six months: Rs.116 crores
• Six months to one year: Rs.23 crores
• One year to two years: Rs.87 lakhs

Management Outlook and Recovery Timeline

Management provided a cautious but optimistic outlook for recovery, acknowledging that Q4FY26 will show improvement compared to Q3FY26, though not sufficient to cover the entire year's shortfall.

Expected Margins for FY26:

• PAT: Above 15.00%
• EBITDA: 22.00%-23.00%

Recovery Timeline:

• Q4FY26: Better than Q3FY26 but still affected
• Q1FY27: Aggressive recovery expected
• FY27: Expected to be better than FY25

The company expects its order book to grow by 40.00%-50.00%, reaching approximately Rs.3,000 crores by Q1 of the next financial year. Management maintains a winning ratio target of 20.00% for new bids, up from the historical 10.00%-15.00%.

Promoter Pledging and Corporate Governance

During the call, investors raised concerns about promoter share pledging, which increased to 28.00% from 11.00% in Q1FY26. Management clarified that out of Rs.210 crores borrowed against shares for personal real estate investments, Rs.70 crores has been repaid, with the outstanding amount at Rs.140 crores. The company plans to reduce this to Rs.100 crores by the end of FY26 and fully settle it by FY27.

Business Diversification

EMS Limited also operates a manufacturing facility near Kanpur in Fatehpur, acquired through NCLT proceedings. The facility produces flex sheets and paper products with 50-100 employees, generating approximately 800-900 tons of output with potential to reach 1,100+ tons in the coming financial year. This business operates self-sufficiently with about 5.00% profit margins.

EMS Limited has announced that its Board of Directors will meet on February 13, 2026, to review and approve the company's quarterly financial performance. The meeting will focus on the standalone and consolidated unaudited financial results for the third quarter and nine months ended December 31, 2025.

Board Meeting Details

The board meeting has been scheduled in accordance with Regulation 29 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The announcement was made through a formal communication to both BSE Limited and National Stock Exchange of India Limited on February 06, 2026.

Trading Window Restrictions

EMS Limited has implemented trading window restrictions as part of its insider trading compliance measures. The company had previously informed stakeholders on December 30, 2025, about the closure of the trading window for designated persons and their immediate relatives.

The trading window closure is designed to prevent insider trading and ensure compliance with regulatory requirements during the period leading up to the financial results announcement.

Company Information

The communication was signed by Ashish Tomar, who serves as the Managing Director and CFO of EMS Limited. The company was formerly known as EMS Infracon Private Limited before its current corporate structure. The announcement maintains the company's commitment to regulatory compliance and transparent disclosure practices in line with stock exchange requirements.