EMS Limited has secured the H-1 status from NHAI for two fee plazas - Rangamati (NH37, Assam) and Bartana (NH-352A, Haryana) - with a total contract value of ₹42.22 crore. This tolling award comes as the company faces operational headwinds, having reported a consolidated net profit drop of 59.30% to ₹15.49 crore in Q1 FY27, reflecting challenges in its core EPC segments. The contract strengthens EMS's short-to-medium-term execution pipeline and provides significant buffer to cash generation, particularly crucial given the company's recent financial performance.
The ₹42.22 crore NHAI fee plaza contract represents EMS's strategic diversification into toll management operations, which are expected to improve working capital cycles traditionally stretched in heavy civil EPC segments. This follows the company's ₹129.80 crore municipal project win in Jodhpur announced in August 2026, executed over 24 months. The diversification into toll collection provides rapid cash-conversion opportunities, complementing the company's massive but slow-moving municipal order backlog. Generating consistent daily toll revenues will serve as an effective buffer against lumpy cash flows from traditional EPC projects.
EMS's recent contract wins provide strong revenue visibility and help offset the impact of Q1 FY27 financial performance challenges. The company maintains a robust order book of ₹2,328.91 crore and continues to secure consecutive national highway and municipal project mandates. While the stock has faced pressure following the sharp decline in Q1 FY27 earnings, the sustained execution of diverse orders is expected to be a key determinant of valuation multiple re-rating. The addition of liquid, operational tolling business models should alleviate working capital strains in the company's traditional EPC segments.
