Afcons Infrastructure Ltd Q1 FY26 Earnings Analysis

- Afcons is targeting 20%-25% top-line growth for FY26, supported by a strong order book and ongoing projects. - Medium to long-term growth guidance remains a sustainable CAGR of around 15%. - The jump in order book in the previous year is expected to reflect in higher turnover in FY26. - The company is confident in converting L1 orders worth INR10,600 crores quickly to support growth. - There is some risk of growth falling closer to or slightly below 20% if project awards are further delayed, though this is considered unlikely. - Growth prospects are backed by increased government infrastructure spending, projects in urban transit, hydro sector, surface transport, marine, and industrial sectors domestically and selective international opportunities. - Afcons plans to improve order bookings in FY26 over FY25 levels (INR15,960 crores booked in FY25), targeting INR20,000–25,000 crores excluding L1 orders.

- FY26 top-line growth guidance: 20%-25%, driven by strong order book and new order bookings of INR20,000-25,000 crores plus over INR10,500 crores of L1 orders. - Medium to long term: Targeting a sustainable CAGR of around 15%. - EBITDA margin: Expected to be maintained at 11%+ despite elevated FY25 margin of 12.8%. - Profit after tax growth: Achieved 8.2% growth in FY25; outlook suggests improvement aligned with revenue growth. - Depreciation expected to increase 10%-12% in FY26 due to capex plans (~INR1,100 crores). - Return ratios (ROCE/ROE) expected to normalize upward as business elevates post accelerated depreciation phase. - Risks include possible delays in order awards and execution, but management confident of quick resolution and keeps guidance unchanged.

- FY25 planned capex was close to INR1,300 crores but actual spend was around INR370 crores due to delayed TBMs for C2 project and deferred project awards. - FY26 capex target is around INR1,100 crores, aligned with new project awards and mobilization. - The company is prepared to ramp up capex further to accelerate growth, including investments in equipment and strategic assets. - Recently incorporated a joint venture company in Saudi Arabia with a local partner to commence bidding activities, indicating strategic investment for international expansion. - Focused on selective opportunities in Middle East (Saudi and Dubai), including potential to be main contractor with entities like Aramco. - No specific mention of additional strategic capital investments beyond these points in the disclosed period.

- No specific details on planned new fundraising through debt or equity for FY26 were provided. - The company is comfortable with current debt levels and aims to maintain gross debt to equity ratio below 0.68 and debt to EBITDA ratio around 1.5x. - They are prepared to raise debt if needed to support capex or project requirements to accelerate growth. - In FY25, they deferred capex due to project delays; for FY26, capex is targeted around INR 1,100 crores. - Overall, the company is in a comfortable position regarding finances and has not indicated immediate plans for equity fundraising.

- As of March 31, 2025, the pending order book stands at INR 36,869 crores, the highest in Afcons' history, approximately 2.9x of the turnover. (Page 5) - Recorded strong order flows of INR 15,960 crores in FY25. (Page 5) - L1 orders (pending awards) are worth INR 10,600 crores. (Page 15) - Expecting several L1 projects to be awarded in Q1 FY26: - Two Pune Ring Road projects worth INR 4,788 crores - Rajasthan Water Supply project worth INR 427 crores - Two Nagpur-Gondia projects (pending land acquisition approvals) (Page 16) - Targeting new order booking in FY26 of INR 20,000 to INR 25,000 crores, excluding L1 orders. (Page 5) - Total order book including L1 projects is around INR 47,000 crores (INR 36,869 crores + INR 10,600 crores). (Page 15-16)