Ahluwalia Contracts (India) Limited — Q1 FY26 earnings call

Call held 18 Aug 2025

Management summary

Ahluwalia Contracts reported a strong Q1 FY26, demonstrating robust growth in both turnover and profitability, with significant margin expansion. The company provided positive updates on key projects and reiterated its confidence in achieving double-digit EBITDA margins and 15-20% revenue growth for FY26. A strategic shift towards the private sector and item-rate contracts continues to drive improved financial performance and a healthy order book.

Highlights

  • Turnover for Q1 FY26 reached ₹1,004.88 crores, marking a 9.3% YoY growth.

  • Net Profit (PAT) surged by 67.03% YoY to ₹51.11 crores in Q1 FY26.

  • EBITDA margin expanded to 8.59% in Q1 FY26, up from 6.58% in Q1 FY25.

  • PAT margin improved to 5.01% in Q1 FY26, compared to 3.29% in Q1 FY25.

  • The updated order book, including July inflows, stands at ₹18,671 crores with no cancellations.

  • Total order inflow for FY26 to date is ₹3,889.06 crores, with an additional ₹1,796.00 crores in L1 projects.

  • Q1 FY26 CAPEX was ₹62 crores, with full-year CAPEX projected at ₹500 crores.

  • The company maintains a strong financial position with borrowings of only ₹2 crores and cash reserves of ₹920 crores.

Key financials

3 periods

Headline

  • Turnover
    ₹1,004.88 Cr
    YoY +9.3%
  • PAT
    ₹51.11 Cr
    YoY +67%
  • EPS
    ₹7.63
  • EBITDA Margin
    8.6%
  • PAT Margin
    5%
  • Net Order Book (as on 30th June 2025)
    ₹16,582.09 Cr
  • Borrowings
    ₹2 Cr
  • Cash Reserve
    ₹920 Cr

Q1 FY26

  • CAPEX
    ₹62 Cr

FY26 till date

  • Total Order Inflow
    ₹3,889.06 Cr

What they filed

Q1 FY27: revenue up 12.0%, net profit down 78.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,011 952 1,216 1,005 1,177 +16%1,061 +11%1,322 +9%1,126 +12%
EBITDA73 84 124 86 129 +77%96 +14%124 +0%48 −44%
Net profit38 49 83 51 79 +108%54 +10%80 −4%11 −78%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 15% to 20%
    Same, 15% to 20% growth.

    — Shobhit Uppal, Deputy Managing Director

  • Topline Growth Revenue · FY27 · High confidence similar 15% kind of growth
    Yes, definitely it's possible.

    — Shobhit Uppal, Deputy Managing Director

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence double digit margin
    So we are projecting a double digit EBITDA margin as far as this whole financial year is concerned, FY'26 is concerned.

    — Shobhit Uppal, Deputy Managing Director

  • EBITDA Margin Profitability · FY27 · High confidence double digit margin
    Shravan, you ask me that question every time we talk. So we feel confident we'll be able to do double digit margin.

    — Shobhit Uppal, Deputy Managing Director

Project Revenue

  • CSMT Project Revenue Project Revenue · FY26 · High confidence 400 crores plus
    Yes, it will be as far as CSMT is concerned, as Vikas just mentioned, we should be doing 400 plus in this financial year from that project.

    — Shobhit Uppal, Deputy Managing Director

  • India Jewellery Park Annual Run Rate Project Revenue · per year (once execution picks up) · Medium confidence Rs. 400 crores to Rs. 500 crores
    So yes, it should be about Rs. 400 crores to Rs. 500 crores, but it would not be prudent for us to commit to that as of now, till the project really takes off.

    — Shobhit Uppal, Deputy Managing Director

  • DLF The Dahlias Project Revenue Project Revenue · from FY27 onward · High confidence Rs. 500 crores
    So, yes, about Rs. 500 crores revenue.

    — Vikas Ahluwalia, Director

Project Completion

  • DLF The Dahlias Project Completion Project Completion · High confidence about 40 months
    It is to be completed in about 40 months.

    — Vikas Ahluwalia, Director

Order Inflow

  • Total Order Inflow Order Inflow · FY26 · High confidence around Rs. 8,000 crores
    I had projected about the same figure around Rs. 8,000 crores in the last call. We should be achieving that.

    — Shobhit Uppal, Deputy Managing Director

Capex

  • Total Capex Capex · FY26 · High confidence about Rs. 500 crores
    We are expecting the CAPEX this year is about Rs. 500 crores.

    — Satbeer Singh, Chief Financial Officer

  • Total Capex Capex · FY27 · High confidence about 200 crores
    Yes, it will be about 200 next year.

    — Shobhit Uppal, Deputy Managing Director

Order Book

  • Order Book Execution Order Book · next two and a half years · High confidence 18,000 crores
    It's about 18,000 crores. So we, and this is to be executed over the next two and a half years and the order pipeline is good.

    — Shobhit Uppal, Deputy Managing Director

Bidding Pipeline

  • Private Sector Bid Pipeline Bidding Pipeline · High confidence Rs. 5,000 crores
    On the private sector side, there is negotiation happening on contracts to the tune of about Rs. 1,000 crores and the bid pipeline is to the tune of about Rs. 5,000 crores.

    — Shobhit Uppal, Deputy Managing Director

  • Private Sector Contracts Under Negotiation Bidding Pipeline · High confidence Rs. 1,000 crores

    — Shobhit Uppal, Deputy Managing Director

Risks & concerns

  • Monsoon/weather impact on execution

    medium

    Unusually heavy rains, especially in NCR, have impacted performance in July and August, suggesting Q2 performance might be similar to Q1.

    Management acknowledged

  • Intense competition in the public sector

    medium

    Increased competition and diluted qualification criteria in government contracts have led to a strategic shift towards the private sector, where competitive intensity is lower.

    Management acknowledged

  • Single client exposure (DLF)

    low

    Management is comfortable with the ₹5,500-6,000 crores exposure to DLF, citing them as a premier, organized, and cash-rich developer.

    Analyst downplayed

  • Slowdown in residential project demand

    low

    Management has not observed a slowdown with their clients and is actively de-risking by not adding to their residential portfolio, focusing on commercial, retail, and institutional projects instead.

    Analyst downplayed

Q&A highlights

3 direct
Progress and revenue contribution of CST and India Jewellery Park projects. Direct
So, with the CST project, the progress is better now compared to the last two quarters... we are now moving towards getting the project in sync to achieve a good run rate of about 60 crores to 70 crores per month. But it will still take some time... Jewellery Parks, so now the project, the client has received the environmental clearance finally in paper... In another two months' time, I think we should be breaking ground.

Provides crucial updates on two of the largest projects in the order book, impacting future revenue visibility and execution pace.

Asked by Mohit from ICICI Securities

Softness in Q1 margins and outlook for achieving double-digit EBITDA margin for the full year. Direct
Q1, traditionally, is a very slow quarter for all construction companies... Our performance is much better than all of them... So we are projecting a double digit EBITDA margin as far as this whole financial year is concerned, FY'26 is concerned.

Addresses investor concerns about Q1 margin performance and reiterates the full-year profitability target, explaining Q1 as a seasonal dip.

Asked by Vaibhav Shah from JM Financial

Discrepancy in reported order book figures and clarification of the current order book. Direct
There has been no order cancellation and our order book till date stands at 18,671 crores. Did you get that?

Clarifies a potential confusion in reported numbers, confirming the actual, higher order book figure and assuring no cancellations, which is critical for future revenue visibility.

Asked by Salil Desai from Marcellus Investment Managers

3 min read 6 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Ahluwalia Contracts reported a turnover of ₹1,004.88 crores in Q1 FY26, marking a 9.3% year-on-year growth from ₹919.35 crores in Q1 FY25. Net profit (PAT) saw a significant increase of 67.03% to ₹51.11 crores, up from ₹30.60 crores in the corresponding quarter. This translated to an EPS of ₹7.63 for Q1 FY26, compared to ₹4.57 in Q1 FY25. The company's EBITDA margin expanded to 8.59% from 6.58% in Q1 FY25, while PAT margin improved to 5.01% from 3.29%.

Order Book and Inflow Dynamics

The net order book as of June 30, 2025, stood at ₹16,582.09 crores, with an execution timeline of 2-2.5 years. Including order inflows till July, the updated order book is ₹18,671 crores, with no order cancellations reported. Total order inflow for FY26 to date is ₹3,889.06 crores, and the company is L1 in two projects worth ₹1,796.00 crores. Management projects total order inflow for FY26 to be around ₹8,000 crores, with an overall order book of ₹18,000 crores to be executed over the next two and a half years.

Key Project Updates and Execution Pace

Progress on the CST project has improved, with 17-20% of the total work done at site, and a target run rate of ₹60-70 crores per month. The India Jewellery Park project is expected to break ground in two months, following environmental clearance, with an anticipated annual run rate of ₹400-500 crores once execution picks up. The DLF The Dahlias project, valued at approximately ₹2,000 crores, is expected to commence ground-breaking from the company's side in September, contributing around ₹500 crores in revenue from FY27 onward and completing in about 40 months.

Profitability Outlook and Margin Strategy

Despite Q1 being a traditionally slow quarter, management expressed confidence in achieving a double-digit EBITDA margin for the full FY26. They also project a double-digit EBITDA margin and a 15% topline growth for FY27. The company's strategy to focus on the private sector, where competitive intensity is lower, has resulted in higher margins compared to government projects. Currently, 55% of the order book is item rate, and 63% comes from the private sector, a significant shift from previous years.

Capital Allocation and Financial Position

The company reported a Q1 FY26 CAPEX of ₹62 crores. Total CAPEX for FY26 is projected to be around ₹500 crores, with a reduction to approximately ₹200 crores for FY27. Borrowings are minimal at ₹2 crores, while cash reserves stand at a healthy ₹920 crores. Key working capital components include retention of ₹397 crores, debtors of ₹623 crores, mobilization advances of ₹675 crores (35% interest-bearing), trade payables of ₹821 crores, inventory of ₹380 crores, and unbilled revenue of ₹557 crores.

Strategic Shift in Sector Focus and Competitive Landscape

Ahluwalia Contracts has consciously shifted its focus from the public sector to the private sector over the last two years, driven by increased competition and diluted qualification criteria in government contracts. The private sector now accounts for 63% of the order book, with 55% being item-rate contracts, which typically offer higher margins. The company is actively pursuing commercial, retail, and institutional projects, and is selective in bidding for large marquee government jobs where competitive intensity is lower. They are also strengthening relationships with premier developers like DLF, with whom they have projects worth ₹5,500 crores.

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