Afcons Infrastructure reported a challenging FY26, marked by its first quarterly loss since 2010. Annual revenue reached INR 12,322 crores, a 5.4% decline year-on-year, with a 11.7% EBITDA margin. The company cited payment delays, supply chain disruptions, and geopolitical impacts as primary headwinds. Despite these setbacks, management emphasized strong long-term fundamentals and provided an optimistic INR 30,000 crore order booking guidance for FY27, supported by a healthy project pipeline across domestic and international markets.
Financial Performance Review
For FY26, Afcons Infrastructure recorded a total revenue of INR 12,322 crores. The Q4 performance was particularly impacted by project-specific provisions, resulting in a net loss of INR 89 crores for the quarter. While the annual profit after tax stood at INR 251 crores, this figure was heavily influenced by a INR 76 crore one-time impact from labor code implementation and sizable provisions for arbitration and marine operation costs. Management described this quarter as an aberration, prioritizing liquidity and risk management over aggressive top-line growth.
Challenges and Operational Headwinds
The company faced significant operational hurdles throughout FY26. Payment delays from government and private clients led to extended receivable cycles, which, combined with geopolitical instability and logistical challenges in overseas markets like Bangladesh, Gabon, and Africa, hampered execution momentum. Furthermore, rising costs for essential materials like fuel and energy, coupled with non-achievement of profit recognition thresholds in certain projects, put downward pressure on margins and operational efficiency.
Strategic Outlook and Order Book
Looking ahead, Afcons remains confident in its long-term trajectory. The company has set an ambitious order booking guidance of INR 30,000 crores for FY27. This is supported by a robust addressable pipeline of INR 4 lakh crores across sectors such as transportation, marine, underground, and water infrastructure. Key growth drivers include upcoming Middle East opportunities and continued execution of high-profile domestic projects, including the Mumbai-Ahmedabad high-speed rail and DMRC underground metro packages.
Capex and Debt Management
The company invested INR 1,069 crores in capital expenditure (CAPEX) during FY26, primarily driven by investments in Tunnel Boring Machines (TBMs). For FY27, the projected CAPEX is estimated at INR 725 crores. Management reiterated its focus on maintaining a comfortable debt-to-equity ratio, which currently stands at 0.65x on a gross basis, and aims to reduce debt levels throughout the current financial year through improved collections and the realization of stuck receivables.
Source: BSE
