This looks poised for some good growth in the next 3 quarters for this year (20%) while having reasonable valuations (13.5 pe) . The first quarter was lacklustre but the management is very confident of growth in the second half of the year.
If this comes through, the pricing can change upwards to reflect this for time and maybe even pe rerating.
Here is some summaries , thanks to AI form the latest con call and numbers from screener -
Key Performance & Financial Highlights:
• FY25 Performance: FY25 was a “transformational year” with record operational and financial performance, establishing a strong foundation for future growth. The company crossed 200 crores in Profit After Tax (PAT) on a consolidated basis, marking a 65% increase over FY24.
• Q1 FY26 Performance: Delivered a robust performance despite temporary challenges. The net profit after tax for Q1 FY26 was 7.84%.
• Revenue & Growth Outlook:
◦ Q1 FY26 revenue was 599 crores, with a monthly run rate close to 200 crores.
◦ Execution is expected to ramp up significantly in the second half of FY26 as monsoon activities subside.
◦ The company is confident in achieving its full-year guidance of 20% growth . Revenue targets for the full year consider heavy monsoons and winter stoppages.
◦ Momentum is expected to improve in Q2 and substantially in Q3.
• EBITDA Guidance: Full-year EBITDA guidance remains at 16.5% to 17.5% , and the company expects to achieve or surpass this. Finance costs are expected to drop as a percentage of topline.
• Balance Sheet & Working Capital: The company has maintained a healthy balance sheet and ensured operational continuity across key projects.
◦ Working capital (excluding retention) was 172.44 days as of March 31, 2025, and has not increased in Q1.
◦ Total collections in Q1 FY26 were 543 crores against a revenue of 599 crores, a significant improvement. Current collections are close to 756 crores.
◦ Generated 54 crores of positive cash flow in the last financial year, with expectations for substantial improvement in the current year through better collections.
◦ The net debt to equity ratio is low at 0.1.
• Interest Rates: Cash credit limits interest rates have come down to 10.3% and are expected to improve further. The outstanding non-convertible debentures (high-interest bearing) have reduced from 100 crores to 61 crores, with a goal to remove them entirely within the next 1-2 quarters. The average interest rate for the company is targeted to be not more than 10%.
Order Book & Project Pipeline:
• Order Book Visibility: The existing order book is in excess of 11,000 crores (excluding a specific MA order), providing clear visibility for 3 years or more .
• FY26 Order Inflow Target: The company aims for 4,000 to 4,500 crores in order inflows for the current fiscal year and believes it will surpass this target.
• Bid Pipeline: The bid pipeline is “very strong,” offering opportunities to select profitable projects.
• Contract Type: The company does not undertake fixed-price contracts . All contracts are variable price, including NBCC projects which feature a 3% annual price escalation clause.
• New Clients & Repeat Orders: Added Hinduja Group of UK to its client portfolio. Expects to secure more repeat orders, particularly in mixed-use construction in mature geographies like Mumbai.
• Growth Segments: Seeing significant traction in data centers (both private and government), and will explore opportunities that offer better margins by including electromechanical parts. Also expects to add projects in the healthcare sector.
Key Project Updates:
• SIDCO: Momentum continues, with commitments of over 700-800 crores for the remaining period. Payments from SIDCO are consistently prompt.
• MAHARA: Execution momentum will increase from Q3 onwards, with work having started on three residential buildings. Committed to 350 crores as a subcontract, aiming for an average building cycle of 60 crores from October.
• NBCC: Profit recognition is expected to commence from Q2 onwards.
• Signature Global: Profit recognition has begun for Phase 1 as the threshold has been crossed. Monthly revenue target is 15 crores for July/August, aiming for 20-23 crores from next month.
• Tata Projects (JV): Profits from the JV, which were around 20 crores last year, are expected to rise substantially from the next financial year after pre-operative expenses are fully written off.
Operational Challenges & Mitigation:
• Seasonal Factors: Q1 was partially impacted by the early arrival of monsoon (end of May into June) and the EID festival-related labor migration . Finishing and interior works are less affected by monsoons.
• Labor Shortage: A “big issue” across the industry due to high demand from the Middle East and Eastern Europe. Residential projects require more blue-collar workers than commercial ones.
◦ Mitigation: The company has adopted innovative recruitment methods, improved working conditions (e.g., providing meals), and currently has 90-95% of its labor requirements met across project sites. Growth targets have factored in this challenge.
• Productivity & Management Tools: Utilizes the Eforce app across project sites to track “boots on ground,” output, and productivity per workman. This provides detailed information to operations teams to improve efficiencies. The Labor Resource Department (LRD) manages labor contractor recruitment.
• Cautious Optimism: While optimistic, the company is “cautiously optimistic,” focusing on clients who meet their requirements and offer a premium for quality and timely construction. This approach stems from past experiences with the NBFC crisis and COVID aftermath.
Accounting & Recoveries:
• Deferred Profit Recognition: Approximately 12 crores of profit from previous quarter projects (Signature Global and NBCC) was deferred due to accounting policy changes. Recognition for Signature Global Phase 1 has started, and NBCC recognition is expected from Q2.
• Questionable Receivables: The auditor (EY) mentioned 66 crores of questionable trade receivables, but the company possesses properties valued over 100 crores to cover these.
• Recovery Targets: The company aims for 65 crores in recoveries from slow-moving debtors and non-core assets for the full year. In Q2, 19.1 crores worth of properties were sold, and a settlement agreement for 27-27.5 crores was reached, totaling 35-40% of the annual budget.
Pledged Shares:
• Promoters have pledged 50 lakh shares for a project-specific limit for SIDCO with the State Bank of India.
• Pledged shares with Aventus have been reduced by 10 lakh shares, and the company aims to eliminate all pledges (except for the SBI/SIDCO project limit) by the end of the current financial year
Historical Growth Rates
Revenue CAGR (3Y/5Y/10Y): 20.6% / 9.0% / 15.5%.
EBITDA CAGR (3Y/5Y/10Y): 20.5% / 8.2% / 19.7%.
Net Profit CAGR (3Y/5Y/10Y): 61.9% / 17.5% / 20.4%.
FY2026 Projections (Assuming 20% Revenue Growth)
Using last year’s EBITDA margin (16.2%) and net profit margin (8.7%):
Metric FY2025 Actual FY2026 Projected Margin Basis (FY25)
Revenue ₹2,350 cr ₹2,820 cr —
EBITDA ₹381 cr ₹457.2 cr 16.2%
Net Profit ₹204 cr ₹244.8 cr 8.7%
Disc - invested