SRM Contractors Ltd Q2 FY26 – The Tunnel Kings of Himalayas with 118% Profit Jump and a 4x Order Book That’s Making Competitors Dizzy

1.At a Glance

SRM Contractors Ltd is what happens when an engineer’s obsession with roads meets the Himalayas’ bad mood. Incorporated in 2008 and now sitting at a market cap of₹1,383 crore, this company has been literally carving its name into mountains — through tunnels, bridges, and slope stabilization projects that make even BRO veterans nod in approval. As ofQ2 FY26 (September 2025), SRM posted aRevenue of ₹192 croreand aPAT of ₹19.4 crore, marking a jaw-dropping101% YoY growth in salesand a118% surge in profits.

The stock, currently trading around₹603, has been on a scenic upward trek — up82% in one yearand27% in the last three months, leaving investors wondering if they should build a highway to the moon next.

With aP/E of 20,ROCE of 31%, andROE of 25.6%, SRM is no small-town contractor anymore — it’s a full-blown Himalayan infrastructure powerhouse. And yes, their order book of₹1,668 crore (4x FY24 revenue)is thicker than the Great Wall of Ladakh. Strap in, this is going to be a high-altitude ride.

2.Introduction

What do you call a company that builds roads where even Google Maps gives up? You call it SRM Contractors. Headquartered in Jammu, this company has made a name out of turning “impossible terrain” into “tender won.” Whether it’s the freezing slopes of Ladakh, the landslides of Uttarakhand, or the winding tunnels of J&K, SRM thrives where most developers prefer a chai break.

In the grand Indian infrastructure circus, where giants like L&T, IRCON, and NBCC fight for headlines, SRM quietly lays down asphalt like a ninja with an excavator. Its projects have spanned32 road & bridge contracts,4 tunnels, and1 slope stabilization marvel— all done with military precision and BRO-level patience.

And yet, it’s not all sweat and concrete. The company runs a tight ship financially —Debt-to-Equity of 0.20, acurrent ratio of 3.88, and zero promoter pledges — a rare trio in the infra sector. With margins holding steady near15% OPMand consistent quarterly growth, SRM is not just digging tunnels — it’s digging gold.

So, the real question is: can SRM continue this Himalayan hustle without tumbling down the debt slope? Let’s find out.

3.Business Model – WTF Do They Even Do?

SRM Contractors’ business model is simple — find a mountain, drill through it, and collect the cheque. The company operates acrossfour verticalsthat make up the backbone of its revenue streams:

a) Roads & Bridges:The bread and butter. SRM builds, widens, and upgrades roads and bridges in treacherous regions like Jammu, Ladakh, and Himachal. Think of them as the Desi Border Road Organisation’s private cousin.

b) Tunnels:This is the sexy stuff — designing and constructing tunnels and caverns for avalanche protection and connectivity. Projects likeTunnel T-5 and T-41 for KRCLare among their showpieces.

c) Slope Stabilization:If roads are glamour, this is the real engineering muscle. SRM designs reinforced slopes to prevent landslides. In mountain regions, that’s the difference between a national highway and a cliffhanger movie.

d) Other Civil Projects:Government housing, irrigation, flood control — basically, whatever makes bureaucrats happy and keeps excavators busy.

They operate onEPC and HAM contracts, giving them flexibility in both execution and revenue timing. Plus, they own300+ heavy construction machines, from batching plants to shotcrete machines — enough to start their own mini army of JCBs.

So next time you see a tunnel in Ladakh or a highway holding up despite snow and slides — chances are, SRM’s logo was there before the first brick.

4.Financials Overview

The company is literally doubling itself every year — like a bacteria colony on steroids. EPS annualized comes to ₹8.47 × 4 = ₹33.88, giving aP/E of ~17.8x— fair for an infra player growing at 100% YoY.

Witty Commentary:Most infra