Infra stock with revenue growth guidance of over 25% for FY26 to keep on your radar

The shares of a recently listed infrastructure engineering and construction company that specializes in infrastructure EPC projects across marine works, highways, bridges, railways, metro systems, tunnels, and oil and gas structures are in focus as they have set a revenue growth target of 25% for FY26. 

Price Action 

The shares of Afcons Infrastructure Ltd, with a total market capitalization of Rs 16,432.62 Crores as of Monday, were trading at Rs 446.80 per share, which was 0.7 percent lower than the previous close of Rs 450.10. 

Govt Support for Infrastructure Sector

In the recent Budget, the Government has allocated Rs 11.2 lakh crore in capital expenditure for infrastructure, which is a 10.1 percent increase over the revised estimate of the last year. The Government’s continued focus on infrastructure development is significant for achieving the vision of a developed nation by 2047. Through government policy and initiatives, it is anticipated that the infrastructure construction sector will see strong growth. 

Order Book

The company has a pending order book of Rs 38,000 Crore as of December 31, 2024; this excludes Rs 10,662 Crores of L1(Lowest bid) and Rs 14,603 Crores of orders booked in the first nine months. The company anticipates an order book of over Rs 45,000 to Rs 50,000 Crore by the end of FY25, providing over 3x revenue visibility for the future. 

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Expected Order Flow Guidance for FY26

The management expects an order flow of Rs 25,000 Crores for FY26. With a current visibility of around Rs 3.46 Lakh crores in the order pipeline for the next two years, with significant portions in the surface transport, hydro underground, and marine sectors. 

Upcoming Projects

The company has an upcoming project for the Dubai Municipality Sewage Tunnel, which is valued between USD 3.5 billion and USD 5 billion. Another project in Maharashtra for the  Bhayandar-Virar connectivity, which is about Rs 75,000 crores of jobs split into 6 packages, is funded by JICA. The company also has various metro expansion projects across multiple cities, including Delhi, Chennai, and Mumbai. 

Future Outlook

The management expects a revenue growth of 20 to 25 percent, more towards 25 percent for FY26, with a long-term CAGR target of around 15 percent over the next few years. The management anticipates continued improvement in margins, with a guidance of maintaining EBITDA margins above 11 percent. 

Financials 

The company reported an increase of 2.73 percent YoY in revenue from operations from Rs 3,126 Crore in Q3FY24 to Rs 3,211 in Q3FY25. Their Net Profits saw a growth of 36 percent YoY from Rs 110 Crore to Rs 149 Crore over the same period. Their EBITDA increased by 14.1 percent YoY from Rs 393 Crore to Rs 448 Crore. 

About 

Afcons Infrastructure Limited is a leading Indian multinational construction and engineering company based in Mumbai. Afcons specializes in infrastructure EPC projects across marine works, highways, bridges, railways, metro systems, tunnels, and oil and gas structures. The company operates in five key verticals: Marine & Industrial, Surface Transport, Rail & Metro, Oil & Gas, and Hydro & Underground.

Written By Adhvaitha Nayani 

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