Ahluwalia Contracts (India) Limited — Q3 FY26 earnings call

Call held 16 Feb 2026

Management summary

Ahluwalia Contracts reported a solid Q3 FY26 with 11.43% YoY revenue growth and 9.38% YoY PAT growth, alongside healthy margin expansion for the 9M period. The company maintains a strong order book of ₹18,679.50 crores, providing good revenue visibility. However, execution faced headwinds from recurring NGT bans and project-specific delays, leading to a slightly moderated FY26 revenue growth outlook. Management is focused on execution and margin improvement for FY27, guiding for 15-20% revenue growth.

Highlights

  • Q3 FY26 revenue grew 11.43% YoY to ₹1,060.72 crores, demonstrating consistent top-line expansion.

  • Q3 FY26 PAT increased 9.38% YoY to ₹54.02 crores, reflecting healthy bottom-line performance.

  • EBITDA margin improved by 19 bps YoY to 9.05% in Q3 FY26, indicating operational efficiency.

  • 9M FY26 PAT surged 55.62% YoY to ₹184.18 crores, driven by strong margin expansion (EBITDA margin up 202 bps to 9.59%).

  • Robust order book of ₹18,679.50 crores provides strong revenue visibility for the next 2.5-3 years, with YTD FY26 inflow at ₹9,562 crores.

Concerns

  • Q3 FY26 PAT margin slightly contracted to 5.02% from 5.11% YoY.

  • Execution in Q3 and Q4 FY26 was impacted by recurring NGT bans in Delhi-NCR (44% of order book) and early Holi, leading to a revised FY26 revenue growth guidance of 10-15% (down from earlier 15-20%).

  • Key projects like CSMT and DLF Dahlias faced significant delays due to redesigns and regulatory changes, impacting current year revenue recognition.

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹1,060.72 Cr
    YoY +11.4%
  • PAT
    ₹54.02 Cr
    YoY +9.4%
  • EBITDA Margin
    9.1%
  • PAT Margin
    5%
  • EPS
    ₹8.06

9M FY26

  • Revenue
    ₹3,242.9 Cr
    YoY +12.5%
  • PAT
    ₹184.18 Cr
    YoY +55.6%
  • EBITDA Margin
    9.6%
  • PAT Margin
    5.6%
  • EPS
    ₹27.49

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.

Order book

high confidence

Total value

₹18,679.5 Cr

as of 2025-12-31 quantified

Execution

executable over next 2.5 to 3 years

Composition

  • Delhi-NCR (geography) 44%

Pipeline

other

Bid pipeline as of now is about INR7,000 crores.

Total order inflow in FY '26 year-to-date is INR9,562 crores. The company is L1 on four projects amounting to INR2,485 crores (including GST).

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹55 Cr this quarter · ₹300 Cr (FY26) planned
    In 9 months, we have incurred around INR193 crores. In this quarter, we have incurred INR55 crores. About INR100 crores. INR100 crores. So around INR300 crores for the entire full year.
  • Debt Gross ₹22 Cr · Net cash ₹818 Cr
    Gross borrowing is INR22 crores, approximately. Cash balance is INR253 crores, and bank balance is INR587 crores.
  • Liquidity Cash ₹840 Cr Cash balance of INR253 crores and bank balance of INR587 crores, totaling INR840 crores.
    Cash balance is INR253 crores, and bank balance is INR587 crores.

Guidance & targets

Revenue

  • FY26 Revenue Growth Revenue · FY26 · Medium confidence 10-15%

    Previously 15-20% → 10-15%

    No, more like anywhere between 10% to 15%.

    — Shobhit Uppal

  • FY27 Revenue Growth Revenue · FY27 · Medium confidence 15-20%
    Next year, it will be 15% to 20%...

    — Shobhit Uppal

  • Q4 FY26 Revenue Revenue · Q4 FY26 · Medium confidence ₹1,400 crores
    Yes, about INR1,400 crores, yes.

    — Shobhit Uppal

Project Execution

  • CSMT Project Execution Project Execution · FY26 · High confidence ₹300-350 crores
    I think totally, we had projected that we will execute in this financial year, we would be executing anywhere between INR300 crores and INR350 crores worth of work on CSMT. And we are confident we will be doing that.

    — Shobhit Uppal

  • CSMT Project Execution Project Execution · FY27 · High confidence ₹700 crores
    As far as the next financial year goes, we should be doing a work of about INR700 crores there.

    — Shobhit Uppal

  • Gem & Jewellery Park Revenue Contribution Project Execution · FY27 · Medium confidence 20-25% of total value
    Of the total value of the project, I think it would be to the tune of about 20% -- 20% to 25%.

    — Shobhit Uppal

  • DLF Dahlias Revenue Contribution Project Execution · FY26 · High confidence 40% of original target (>₹100 crores)

    Previously >₹100 crores → 40% of original target (>₹100 crores)

    No. This year, it will be about 40% of that because new earthquake codes were put in place, and DLF has redesigned or is in the process of redesigning or doing the structural design again.

    — Shobhit Uppal

  • DLF Dahlias Revenue Contribution Project Execution · FY27 · High confidence ₹3-3.5 billion
    From Dahlias for the next financial year, it remains what we had said last year.

    — Shobhit Uppal

Profitability

  • Operating Margin Profitability · FY27 · Medium confidence 10-10.5%
    Okay. Okay. But a possibility towards 10.5% is there for next year? Definitely doable.

    — Shobhit Uppal

Order Inflow

  • FY27 Order Inflow Order Inflow · FY27 · Medium confidence slightly lesser than ₹9,500 crores (possibly ₹5,000-6,000 crores)
    I think logically speaking, next year, the inflow will be slightly lesser. INR5,000 crores, INR6,000 crores?

    — Shobhit Uppal

Market context

  • Operating Margin Profitability · FY26 · High confidence double digit
    Yes, this year would be double digit.

    — Satbeer Singh

What to watch in Q4 FY26

Gem & Jewellery Park Work Start

Next quarter (Q1 FY27)
Current Drawings/approvals coming, client handing over part of site
Target Work starts in Q1 FY27

Why it matters

This is a significant new project, and its commencement is crucial for contributing to FY27 revenue targets.

We will start it in Q1 FY '27. I mentioned last time around also in April, I said we'll start -- the drawings -- approvals are coming in now, and the client is in the process of handing over a part of the site to us.

Risks & concerns

  • NGT Ban/Pollution Impact on Execution

    medium

    Recurring annual issue, especially in Delhi-NCR (44% of order book), impacting project execution and top-line, leading to revised FY26 growth guidance.

    Management acknowledged

  • Labor Availability Post-Festivals/Elections

    medium

    A 'full-blown issue' where labor force returns home during festivals/elections, causing disruptions, but industry is adapting with mechanization and offsite work.

    Management acknowledged

  • Project Delays (CSMT, DLF Dahlias, Gem & Jewellery Park)

    medium

    CSMT project faced 'huge delay' due to redesign, DLF Dahlias delayed by new earthquake codes, and Gem & Jewellery Park awaiting site handover, impacting revenue recognition timelines.

    Management acknowledged

  • Raw Material Cost Inflation

    low

    Inflation in steel and cement is mostly passed through via base price clauses, but indirect impacts on other equipment are noted.

    Management acknowledged

  • Payment Delays from State Government Projects

    low

    Specific issues with final payments stuck in Himachal Pradesh and slowdown in Assam due to impending elections, though other state projects are stable.

    Management acknowledged

Q&A highlights

6 direct
FY26/FY27 Revenue Growth vs Order Book Partial
Vaibhav, you asked me this every time. We are being slightly conservative. Yes, the order book is it was healthy last time around. It's healthier now. We've given a projection of about INR8,000 crores worth of order book in this inflow fresh order inflow in this year. We've crossed that. It's at about INR9,500 crores. So yes, we are being conservative when we are saying 15% to 20%.

Analyst questioned if growth could be higher given the strong order book, and management reiterated conservative guidance despite high order inflow.

Asked by Vaibhav Shah

Impact of NGT Ban on Execution Direct
Yes. So first question, this as I mentioned to Vaibhav in response to the question that he asked, the NGT impact this year has been has been more prolonged, so to say. Since 44% of our order book is from NCR, December and January have been impacted. Even the first week of February was impacted as far as the project closure on account of pollution was concerned.

Management explained how recurring NGT bans in Delhi-NCR significantly impacted execution and led to a downward revision of FY26 revenue growth guidance.

Asked by Lakshmi Narayanan

Labor Availability Issues Direct
It's actually a full-blown issue. It's not a lurking issue. And but again, the slight advantage of this becoming such a large issue is that, again, all of us are aware of this fact now. It's not in the day, it's gone by, it was only the contractor who used to grapple with this issue. Now everybody is aware. More importantly, the clients are aware of this.

Management acknowledged labor availability as a significant, recurring issue but highlighted industry-wide awareness and mitigation efforts like mechanization and offsite work.

Asked by Lakshmi Narayanan

CSMT Project Delays and Cost Overruns Direct
Yes, there is a delay. There is a huge delay. And so we've as I had been explained in the earlier calls, the entire design of this project had to be redone because the design conceptual design, which was given by the tender, was not tenable. Certain aspects of that design were not tenable on the ground. That designing is complete, work is now moving at a fast clip there. That's why there's a delay.

Management confirmed significant delays in the CSMT project due to a complete redesign, impacting timelines but noted work is now accelerating, with cost impacts being managed through claims.

Asked by Rajat

DLF Dahlias Project Delay Direct
No. This year, it will be about 40% of that because new earthquake codes were put in place, and DLF has redesigned or is in the process of redesigning or doing the structural design again. So that is why a lot of work had to be redone, obviously, at the client's cost. So that is why our target is going to be our turnover is going to be lesser by March end.

A major project faced delays due to new earthquake codes requiring redesign, significantly impacting FY26 revenue contribution, but work is expected to resume post-Holi.

Asked by Mahesh Patil

Impact of New Labour Code Direct
INR1.31 crores that have been factored during these 9 months due to the introduction of the Labour Code.

Management quantified the direct financial impact of the new Labour Code on the company's financials for the 9-month period.

Asked by Sandip Sabharwal

Government Project Payment Issues Partial
Other than in the odd project here and there, like we're doing a central university project in the state of Himachal Pradesh, which is partly funded by the state and partly by the center. So, there we are, facing some challenges. That project is nearing completion. We are hoping to complete it in Q1 of FY '27. So there is a bit of a challenge there. We completed another hospital for the center and state government in, again, Himachal. The final payment has been stuck for a while. So yes, with the state of Himachal, there is a bit of an issue. And we are also seeing some issues with the state of Assam.

Management highlighted specific instances of payment delays from state government projects in Himachal Pradesh and Assam, indicating localized working capital challenges.

Asked by Parvez Qazi

FY27 Order Inflow Outlook Direct
As I said, we are picking and choosing our projects. We have focused on residential is not there. So I think logically speaking, next year, the inflow will be slightly lesser. INR5,000 crores, INR6,000 crores?

Management indicated a strategic shift towards prioritizing execution and margins, expecting lower order inflow in FY27 compared to FY26, moving away from aggressive order booking.

Asked by Shravan Shah

3 min read 6 chapters

Detailed narrative

Q3 FY26 and 9M FY26 Financial Performance

Ahluwalia Contracts reported a turnover of ₹1,060.72 crores in Q3 FY26, marking an 11.43% year-on-year growth from ₹951.96 crores in Q3 FY25. Profit After Tax (PAT) for the quarter stood at ₹54.02 crores, a 9.38% increase from ₹49.39 crores in the prior year. The EBITDA margin for Q3 FY26 was 9.05%, slightly up from 8.86% in Q3 FY25, while PAT margin was 5.02%. For the nine months ending December 2025, turnover reached ₹3,242.90 crores (up 12.49% YoY), and PAT significantly grew by 55.62% to ₹184.18 crores, with EBITDA margin at 9.59% and PAT margin at 5.6%.

Order Book and Inflow Dynamics

As of December 31, 2025, the company's net order book was ₹18,679.50 crores, providing revenue visibility for the next 2.5 to 3 years. Total order inflow for FY26 year-to-date is ₹9,562 crores (₹8,959 crores excluding GST). The company is currently L1 on four projects valued at approximately ₹2,485 crores (including GST). The bid pipeline stands at around ₹7,000 crores. Management indicated a strategic shift for FY27, expecting slightly lower order inflow (possibly ₹5,000-6,000 crores) as the focus shifts to efficient execution and margin improvement.

Impact of NGT Ban and Seasonal Disruptions

Execution in Q3 and Q4 FY26 has been significantly impacted by recurring NGT (National Green Tribunal) bans and pollution-related project closures in Delhi-NCR, which constitutes nearly 44% of the company's order book. This, coupled with the early Holi festival in March causing labor disruptions, led to a revision of the FY26 revenue growth guidance to 10-15% from an earlier 15-20%. Management acknowledges this as a recurring annual challenge but notes that the ecosystem is becoming more aware and adapting with measures like offsite work and mechanization.

Project Updates (CSMT, DLF Dahlias, Gem & Jewellery Park)

The CSMT project experienced a 'huge delay' due to a complete redesign but is now progressing, with an expected execution of ₹300-350 crores in FY26 and ₹700 crores in FY27. The DLF Dahlias project was also delayed as new earthquake codes necessitated redesigns, impacting FY26 revenue (only ~40% of the original target). Work on DLF Dahlias is expected to pick up post-Holi. The Gem & Jewellery Park project is anticipated to commence in Q1 FY27, with 20-25% of its total value projected for execution in FY27.

Capital Structure and Liquidity Position

The company reported gross borrowings of approximately ₹22 crores. It maintains a strong liquidity position with a cash balance of ₹253 crores and a bank balance of ₹587 crores, totaling ₹840 crores in cash and equivalents. Capital expenditure for the first nine months of FY26 amounted to ₹193 crores, with an additional ₹55 crores incurred in Q3 FY26. The estimated capex for Q4 FY26 is ₹100 crores, bringing the full-year FY26 capex to around ₹300 crores, with a similar amount projected for FY27.

Outlook and Margin Guidance

Management guides for a revenue growth of 15-20% for FY27. Operating margins are expected to be 'double digit' for FY26 and '10-10.5%' for FY27, reflecting a focus on efficiency and profitability. The company is strategically picking and choosing projects, moving away from aggressive residential project bidding, especially in NCR, to concentrate on institutional, airport, hotel, and commercial projects. The impact of the new Labour Code for 9M FY26 was ₹1.31 crores, and raw material cost inflation is largely passed through in contracts.

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