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    Ahluwalia Contracts (India) Q1 FY27 earnings call

    AHLUCONT
    Construction·17 Aug 2026
    Management Summary

    Ahluwalia Contracts reported a 12.03% YoY increase in turnover to INR 1,125.81 crores for Q1 FY27, but PAT saw a sharp 77.65% decline to INR 11.42 crores, with EBITDA margin compressing to 4.29%. This was attributed to a INR 29 crore reduction in the AIIMS Jammu bill, significant labor wage inflation (35-40% in NCR), increased staff costs, and execution challenges in West Bengal and Assam. The company maintains a robust order book of INR 20,663.52 crores but has revised its FY27 order inflow guidance downwards due to market volatility and a more conservative bidding strategy.

    Highlights

    3

    • Turnover grew by 12.03% YoY to INR 1,125.81 crores.

    • Strong order book of INR 20,663.52 crores provides revenue visibility for the next 3 to 3.5 years.

    • Cash and bank balances stood at INR 920 crores, indicating healthy liquidity.

    Concerns

    4

    • PAT declined significantly by 77.65% YoY to INR 11.42 crores.

    • EBITDA margin compressed to 4.29% from 8.59% YoY, primarily due to AIIMS Jammu bill reduction (2.6% impact), labor cost increases (35-40% in NCR), and higher staff costs.

    • Adverse impact on execution and IDC costs from West Bengal and Assam SIR drives and elections.

    • Guidance for FY27 order inflow revised downwards to INR 4,000-5,000 crores from INR 8,000 crores due to a conservative approach amid market volatility.

    Key financials

    Single quarter

    05 metrics
    1. 01Turnover₹1,125.81 Cr+12.0%YoY
    2. 02PAT₹11.42 Cr-77.6%YoY
    3. 03EBITDA Margin4.3%
    4. 04PAT Margin1%
    5. 05EPS₹1.7

    Order Book

    high confidence

    Total Value

    ₹ 20,663.52 crores

    as of 2026-06-30

    quantified

    Inflow this qtr

    ₹ 512.81 crores

    Execution

    to be executed over the next 3, 3.5 years

    Composition

    NCR(geography)
    50.0%
    Fixed Price(contract type)
    10.3%

    Pipeline

    L1 awaiting loa

    RML project L1, value INR 500 crores, not yet converted to work order.

    "The company is being conservative in its approach towards picking up new orders due to market volatility and increased costs, leading to a revised order inflow target."

    Source:
    Prepared remarks

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹220 crores

    cut — reduction for this quarter

    Debt

    Gross ₹2.28 crores

    Cost 8.0%

    Liquidity

    Cash ₹920 crores

    Cash and bank balances, including cash and bank balance is INR920 crores.

    Guidance & targets

    14
    CategoryTargetPriority
    Revenue
    Revenue Growth
    12-15%
    		Medium
    Profitability
    EBITDA Margin
    Not double-digit
    		High
    Profitability
    EBITDA Margin Recovery
    Back to Q1 FY26 levels
    		Medium
    Project Billing
    Gems & Jewellery Park Billing
    INR 100 crores
    		Medium
    Project Billing
    Gems & Jewellery Park Billing
    INR 450 crores
    		Medium
    Project Billing
    CST Project Billing
    INR 400-450 crores (hopeful to cross INR 500 crores)
    		Medium
    Project Billing
    CST Project Billing
    INR 700 crores
    		Medium
    Project Billing
    Central Vista Billing
    INR 700 crores
    		High
    Project Billing
    Central Vista Billing
    INR 1,000 crores
    		High
    Project Completion
    Gems & Jewellery Park Completion
    3.5 years
    		High
    Project Completion
    Central Vista (Nirman Bhawan) Building Completion
    End of next year
    		High
    Project Completion
    Central Vista Entire Project Completion
    FY29
    		High
    Order Inflow
    Order Inflow
    INR 4,000-5,000 crores
    		Medium
    Capex
    Capex
    INR 220-250 crores
    		High

    What to watch in Q2 FY27

    5

    Client compensation for labor cost increases

    Next two quarters
    CurrentClaims submitted, client discussions ongoing
    TargetSome compensation flowing in

    Why it matters

    Securing client compensation for increased labor costs is crucial for margin recovery, especially for projects without escalation clauses.

    But we expect that over the next two quarters, some of this compensation will start flowing in.

    Risks & concerns

    8
    RiskSeverity

    AIIMS Jammu bill finalization dispute

    Finalization of AIIMS Jammu bill reduced value by INR 29 crores, leading to a dispute that will go to arbitration, impacting Q1 EBITDA by 2.6%. — Management acknowledged

    medium

    West Bengal and Assam project execution delays

    SIR drives and elections in West Bengal and Assam led to reduced turnover and higher IDC costs, impacting EBITDA margins. — Management acknowledged

    medium

    Significant labor wage inflation in NCR

    Minimum wage increased by 35-40% in NCR (50% of order book), leading to substantial increases in wage costs and impacting margins. Client compensation is uncertain and expected to take 2 quarters. — Management acknowledged

    high

    Increased staff costs

    Employee base significantly increased to strengthen organization and mobilize staff for enlarged project portfolio, contributing to higher staff costs. — Management acknowledged

    medium

    Potential NGT impact on Q3 margins

    Rumors about NGT impact could affect Q3 margins, but the extent is currently unquantifiable. — Management acknowledged

    medium

    Material price volatility and supply chain disruptions

    Impacted by price increases and supply chain issues (e.g., switchgear delivery delays from 4-6 weeks to 3-4 months) due to external factors like war. — Management acknowledged

    medium

    Design changes delaying projects

    Projects like Gems & Jewellery Park and DLF Downtown are experiencing delays due to client-side design changes, affecting execution pace. — Management acknowledged

    low

    Delayed payments from government clients

    A Central University project in Himachal has not paid for 5 months due to the project exceeding its budget, despite certified bills. — Management acknowledged

    low

    Q&A highlights

    8

    “The primary reasons for the dip in EBITDA margin are as under. We have -- there has been a finalisation of the bill of the AIIMS Jammu project, which has resulted in a reduction of bill value by INR29 crores. ... The adverse impact on this account is 2.6% on our EBITDA. Then there has been an adverse impact due to the West Bengal and Assam SIR drives and elections. ... during this quarter, labor rates have increased significantly in NCR, which contributes nearly 50% to our total portfolio. The minimum wage increase has been to the tune of about 35% to 40%, spanning over unskilled and skilled categories. ... Then there has been an increase in our staff costs...”

    Management provided a detailed breakdown of the factors contributing to the significant EBITDA margin compression, quantifying the impact of AIIMS Jammu and highlighting the severity of labor cost increases.

    asked by Shravan Shah

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance and Margin Compression

    Ahluwalia Contracts reported a 12.03% YoY increase in turnover, reaching INR 1,125.81 crores for Q1 FY27. However, profitability saw a significant decline, with PAT falling by 77.65% YoY to INR 11.42 crores. The EBITDA margin compressed sharply to 4.29% from 8.59% in Q1 FY26, and PAT margin dropped to 1% from 5.01%. This compression was primarily driven by a INR 29 crore reduction in the AIIMS Jammu bill, a 2.6% impact on EBITDA, and substantial increases in labor and staff costs.

    02

    Impact of Labor Wage Inflation and Client Engagement

    Labor rates in the NCR region, which accounts for nearly 50% of the company's portfolio, surged by 35-40% across unskilled and skilled categories. This, coupled with increased staff costs due to organizational strengthening for an enlarged project portfolio, led to a substantial rise in wage expenses. Management clarified that these increases are largely demand-supply driven, not statutory. The company is engaging with clients, particularly for projects without labor escalation clauses, to seek compensation, expecting some resolution within the next two quarters.

    03

    Project Execution Challenges and Outlook

    Execution was hampered by adverse impacts from West Bengal and Assam SIR drives and elections, leading to reduced turnover and higher IDC costs. Additionally, projects like Gems & Jewellery Park and DLF Downtown faced delays due to client-side design changes. Despite these challenges, key projects like Central Vista are ramping up, with INR 700 crores billing targeted for FY27 and INR 1,000 crores for FY28. The company aims to complete the Nirman Bhawan building by the end of next year and the entire Central Vista project by FY29.

    04

    Order Book and Revised Inflow Guidance

    The company maintains a robust order book of INR 20,663.52 crores as of June 30, 2026, providing revenue visibility for the next 3 to 3.5 years. Order inflow for FY27 till June 30, 2026, stood at INR 512.81 crores. However, management has revised its full-year FY27 order inflow guidance downwards to INR 4,000-5,000 crores from an earlier target of INR 8,000 crores. This conservative approach is attributed to market volatility🌐 and increased material and labor costs, leading to less aggressive bidding.

    05

    Capital Allocation and Financial Position

    The company reported minimal gross debt of INR 2.28 crores and healthy cash and bank balances of INR 920 crores. The interest-bearing portion of mobilization advances stood at 31% with an average interest rate of 8%. The FY27 capex plan has been reduced to INR 220-250 crores from the initial INR 300 crores. Management reiterated its focus on business growth, digitization, efficiency, and machinery investment, stating that share buybacks are not currently on the agenda despite the stock's underperformance and a cash-rich balance sheet.

    This is an AI-generated summary of a publicly available earnings call transcript.