At a Glance
Energy Infrastructure Trust (EIT) is basically the East-West Pipeline dressed up as a SEBI-registered InvIT, promising you fat dividends while laughing at your attempts to calculate P/E. The Q1 FY26 numbers were a roller coaster – operating profits up, PAT barely there, and EPS hanging by a thread. The market doesn’t care though, because with a 608x P/E and 10% dividend yield, this trust is playing the ultimate “high risk-high income” game. Brookfield sponsors it, Reliance babysits the pipeline, and unitholders pray the gas keeps flowing.
Introduction
Ah, Energy Infrastructure Trust. The love child of Reliance’s pipeline and Brookfield’s investment management genius. It’s one of those InvITs that makes investors scratch their heads: how can something yield nearly 10% dividends yet trade at a P/E ratio that would make even Amazon blush?
This quarter, sales were flat (₹970 Cr), operating margins cushy (39%), and net profit a measly ₹32 Cr. Dividend lovers cheered; value investors screamed. The East-West Pipeline continues to pump gas and cash, but the equity story? Well, that’s murkier than the Krishna-Godavari basin.
Business Model (WTF Do They Even Do?)
Energy Infrastructure Trust owns Pipeline Infrastructure Ltd, which operates the 1,480 km East-West Pipeline (RIL’s old toy). It transports natural gas across India – think of it as the country’s oxygen line for energy but owned by a trust instead of the government.
Revenue model? Toll-like tariffs on gas volume transported. Risks? If volumes drop, cash flows suffer. On the plus side, EIT is structured to distribute at least 90% of cash flows to unitholders. Translation: You get dividends as long as gas keeps flowing and Brookfield keeps smiling.
Financials Overview
Q1 FY26 Snapshot:
- Revenue: ₹970 Cr (flat YoY, -1.5% QoQ)
- EBITDA: ₹375 Cr (margin 39%)
- PAT: ₹32 Cr (from ₹31 Cr last quarter – congrats on surviving)
- EPS: ₹0.48 (annualized ₹1.9 → P/E = 82 / 1.9 ≈ 43, but screener shows 608 because TTM profit is abysmal)
- Dividend: 9.95% yield (basically paying you to ignore earnings)
The trust has a pattern: stable revenues, chunky dividends, and profits that play hide-and-seek. Debt is stable at ₹6,604 Cr, but interest eats a third of operating profits.
Valuation
Let’s play the valuation game, shall we?
- P/E Method:
Annualized EPS ₹1.9 × industry multiple 15 → Fair Value ≈ ₹28 (ouch). - EV/EBITDA:
EV ≈ ₹5,444 Cr + ₹6,604 Cr = ₹12,048 Cr.
EBITDA (annualized) ≈ ₹1,500 Cr.
EV/EBITDA = 8x → Fair Value ≈ ₹96. - DCF (Simplified):
Assume annual cash flow ₹1,200 Cr, WACC 10%, terminal growth 2%.
PV ≈ ₹7,200 Cr → Per unit ≈ ₹85.
Fair Value Range: ₹28 – ₹96. Current price ₹82 sits comfortably in the dividend comfort zone.
What’s Cooking – News, Triggers, Drama
- Sponsor Brookfield may sell units – potential overhang.
- Conversion to a public InvIT approved – more liquidity, more volatility.
- Dividend continues to lure income seekers.
- Any policy hit on gas tariffs? Expect chaos.
Balance Sheet
| ₹ Cr | FY25 |
|---|---|
| Assets | 13,660 |
| Liabilities | 13,660 |
| Net Worth | 1,390 |
| Borrowings | 6,604 |
Auditor Roast: Assets are shrinking, reserves are deep in negative, and debt is clinging like a Stage-5 clinger. But hey, cash flows are fine – so who cares?
Cash Flow – Sab Number Game Hai
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Ops | 1,600 | 2,079 | 1,182 |
| Investing | 416 | -295 | 422 |
| Financing | -1,628 | -1,570 | -1,560 |
Remarks: Operations generate cash, financing sucks it back out for debt servicing and distributions. Typical InvIT life.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 0.46% |
| ROCE | 4.2% |
| P/E | 608 |
| PAT Margin | 3% |
| D/E | 4.75 |
Remarks: Sexy dividends, stressy everything else.
P&L Breakdown – Show Me the Money
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 2,744 | 3,666 | 3,946 |
| EBITDA | 2,047 | 2,186 | 1,358 |
| PAT | 546 | 822 | 9 |
Remarks: EBITDA partying, PAT disappearing. Classic InvIT behavior.
Peer Comparison
| Name | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Altius Telecom | 22,055 | 823 | 55 |
| Indus Infra Trust | 803 | 491 | 10 |
| Cube Highways | 3,523 | -39 | – |
| Energy InfrTrust | 3,946 | 9 | 608 |
Remarks: Peers have real earnings. EIT has real dividends. Pick your poison.
Miscellaneous – Shareholding, Promoters
- Sponsor: Brookfield (via Rapid Holdings 2 Pte)
- Promoter Holding: Not disclosed like a shy teenager.
- Trustee: IDBI Trusteeship (babysitting the debentures).
- Buzz: Brookfield could offload units; AGM approved public InvIT status.
EduInvesting Verdict™
Energy Infrastructure Trust is the kind of investment your dividend-hungry uncle swears by. It throws cash at you while laughing in the face of profitability. Revenues are stable thanks to long-term contracts, but PAT is an endangered species. The balance sheet is debt-heavy, and the P/E is absurd if you take net profits seriously.
SWOT Quickie:
- Strength: Stable cash flows, 10% dividend yield.
- Weakness: Low profitability, high leverage.
- Opportunity: Public InvIT conversion may attract new investors.
- Threat: Regulatory risks, sponsor unit sales.
Final word? It’s not a stock; it’s a cash machine with a weak engine. Ride it for dividends, not growth.
Written by EduInvesting Team | 31 July 2025
SEO Tags: Energy Infrastructure Trust, InvIT, Brookfield, Dividend Stocks
