Afcons Infrastr.

Afcons Infrastructure delivered a robust Q3 FY25, with total income growing 4.71% YoY to INR 3,332 crores. EBITDA saw a significant 14.0% YoY increase to INR 448 crores, leading to a 111 basis points expansion in EBITDA margins to 13.5%. Profit After Tax (PAT) surged 35.45% YoY to INR 149 crores, with PAT margins improving to 4.5%. The company also announced an upgrade in its credit rating to AA- for long-term and A1+ for short-term by CRISIL, reflecting its strong business profile and execution capabilities.

As of December 31, 2024, Afcons' pending order book stood at INR 38,000 crores. The company secured INR 14,603 crores in orders during the first nine months of FY25, with an additional INR 1,283 crores received in January 2025 from DP World. With projects worth INR 10,662 crores in L1 status, management anticipates crossing INR 30,000 crores in order intake for the current year, projecting a year-end order book of INR 45,000-50,000 crores, providing over 3x revenue visibility for the future. For FY26, the company targets an order inflow of INR 25,000 crores.

Management highlighted the government's continued commitment to infrastructure, with an INR 11.2 lakh crore capital expenditure allocation, a 10.1% increase YoY. Afcons is strategically positioned to capitalize on emerging opportunities, leveraging its expertise in diverse segments like marine, industrial, metro, and hydro. The company is also actively engaged with ministries and NITI Aayog to advocate for supportive policies for project exports, aiming to elevate Indian companies to global player status. International markets like Dubai, Saudi, and Eastern Europe are key focus areas.

Net working capital remained elevated due to delays in work certification and payment releases in some projects. Trade receivables stood at INR 3,140 crores, inventories at INR 1,576 crores, and unbilled revenue at INR 6,134 crores as of 9M FY25. Management expects these issues to be resolved by Q4. Despite IPO proceeds used for debt repayment, finance costs were impacted by a shift in project mix, with 70-75% of recently bagged projects being interest-bearing compared to an earlier 25%. Net debt for 9M FY25 was INR 1,788 crores, with a net debt-to-equity ratio of 0.35x, and the company targets reducing net debt to INR 2,000 crores by FY25 end.

Afcons incurred INR 250 crores in capex during 9M FY25, with INR 125 crores in Q3 FY25. The full-year capex is expected to be around INR 450-500 crores, lower than budgeted due to shifts in project awards. Management noted delays in TBM machine procurement, partly due to border-related skirmishes, which could temporarily impact projects awarded in the last year. However, government initiatives for indigenization and expected resolutions are anticipated to mitigate long-term issues. Future capex for FY26-27 is expected to be higher than earlier budgeted, but the overall 3-year quantum might see a slight reduction as some equipment becomes free from completed projects.

Afcons maintains a strong international presence, ranking 139th in the Top 250 international contractor list by ENR 2024. It is the highest-ranked Indian contractor in Marine (14th largest) and the only Indian contractor in the top 25 for Bridges (12th largest) and top 50 for Transportation (45th largest). The company has a 2-year bid pipeline visibility of INR 3.46 lakh crores, with approximately 30% from overseas markets and 70% from domestic. Key upcoming projects include Dubai municipality sewage tunnels ($3.5-$5 billion), Bhayandar-Virar connectivity (INR 75,000 crores), Brahmaputra tunnel, and various metro expansions across India.