Ahluwalia Contracts (India) Limited — Q4 FY25 earnings call

Call held 2 Jun 2025

Management summary

Ahluwalia Contracts reported a steady Q4 FY25 performance with a 4.48% YoY turnover growth and a significant 51.44% increase in PAT (excl. exceptional items), driven by improved margins. The company concluded FY25 with a healthy order book of ₹15,775.08 crores and strong order inflow. Management provided a positive outlook for FY26, targeting 15% revenue growth and double-digit EBITDA margins, while acknowledging challenges like labor availability and project-specific delays.

Highlights

  • Q4 FY25 Turnover stood at ₹1,215.84 crores, marking a 4.48% YoY growth.

  • Q4 FY25 PAT (excluding exceptional items) increased by 51.44% YoY to ₹83.16 crores.

  • EBITDA margin for Q4 FY25 was 10.17%, up from 8.96% in Q4 FY24.

  • FY25 Turnover reached ₹4,098.62 crores, a 6.31% increase from FY24.

  • Order book as of March 31, 2025, was robust at ₹15,775.08 crores, providing 2-2.5 years of revenue visibility.

  • FY25 Order Inflow was strong at ₹8,436.69 crores.

  • Management guided for approximately 15% revenue growth and ₹7,000-8,000 crores in order inflow for FY26.

  • Capex for FY26 is projected at around ₹200 crores, primarily for high-rise building specialized machinery.

Concerns

  • Labor Availability and Wage Inflation

Key financials

3 periods

Headline

  • Order Book (as of Mar 31, 2025)
    ₹15,775.08 Cr

Q4 FY25

  • Turnover
    ₹1,215.84 Cr
    YoY +4.5%
  • PAT (excl. exceptional)
    ₹83.16 Cr
    YoY +51.4%
  • EBITDA Margin
    10.2%

FY25

  • Turnover
    ₹4,098.62 Cr
    YoY +6.3%
  • PAT (excl. exceptional)
    ₹201.51 Cr
    YoY -12.6%
  • EBITDA Margin
    8.3%
  • Order Inflow
    ₹8,436.69 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 Growth

  • Revenue growth Revenue Growth · FY26 · Medium confidence 15%
    As regards the revenue guidance, about 15%.

    — Shobhit Uppal, Deputy Managing Director

  • Revenue growth Revenue Growth · FY27 · Low confidence 30% (₹6,000 crores)
    I said 30%. So, yes, if the industry keeps on moving forward, there is no cash shortage, there is no sort of international event which impacts our economy, there is no reason why we should not be eyeing Rs. 6,000 crores in the subsequent year, FY '27.

    — Shobhit Uppal, Deputy Managing Director

Order Inflow

  • Order inflow Order Inflow · FY26 · Medium confidence ₹7,000-8,000 crores
    the targeted order inflow should be on the similar lines, about Rs. 7,000 crores to Rs. 8,000 crores in this financial year.

    — Shobhit Uppal, Deputy Managing Director

Capex

  • Capex Capex · FY26 · High confidence ₹200 crores
    About Rs. 200 crores.

    — Shobhit Uppal, Deputy Managing Director

Project Execution

  • CSMT project revenue Project Execution · FY26 · Medium confidence ₹400-500 crores

    Previously ₹750 crores → ₹400-500 crores

    In CSMT, we are looking at a target of about Rs. 400 crores to Rs. 500 crores in this year.

    — Shobhit Uppal, Deputy Managing Director

  • Gems and Jewellery Park project start Project Execution · FY26 · Low confidence Q3 FY26
    We are still not clear. Probably it will be in Q3 FY '26.

    — Shobhit Uppal, Deputy Managing Director

  • Medical college at Chapra completion Project Execution · FY26 · High confidence next six months
    Yes, it will be completed in the next six months.

    — Shobhit Uppal, Deputy Managing Director

Working Capital

  • Working capital days Working Capital · FY26 · High confidence Similar to 88 days
    Ahead also it should be similar, going ahead? That has to be similar.

    — Satbeer Singh, Chief Financial Officer

  • Interest-bearing mobilization advance percentage Working Capital · Ongoing · High confidence 40%

    Previously 58% → 40%

    last year interest-bearing advance was 58%, now it is 40%. So, it's come down, and it will come down further.

    — Shobhit Uppal, Deputy Managing Director

Market context

  • EBITDA margin Profitability · FY26 · High confidence Double-digit
    So, there will be a double-digit margin in this financial year.

    — Shobhit Uppal, Deputy Managing Director

Risks & concerns

  • Labor Availability and Wage Inflation

    high

    Labor is in extremely short supply, especially skilled workforce from Bihar (due to upcoming elections), impacting project performance and execution pace.

    Management acknowledged

  • Project Delays (CSMT, Gems & Jewellery Park)

    medium

    CSMT project faces design issues and work productivity challenges, leading to revised FY26 revenue guidance. Gems & Jewellery Park project start is delayed awaiting clearances.

    Management acknowledged

  • NGT Issues and Environmental Regulations

    medium

    Past NGT issues caused project delays; management expects lesser pain this year due to government steps but remains a watch item.

    Management acknowledged

  • Raw Material Cost Escalation

    low

    Management states they are passing on costs and have mitigation strategies like owning a quarry and fabrication units for CSMT project.

    Management acknowledged

Areas of evasion (2)

  • Breakup of new orders vs. change in scope for order inflow
  • Specific percentage of new order inflow from private sector

Q&A highlights

3 direct
CSMT Project Execution and Revised Guidance Direct
Most of the design issues have been resolved. But in a project as complex as this... there continue to be issues... Secondly, work or productivity on the ground... is dependent on as and when closures or block closures are given to us. This year, substantially, we are looking to work on the greenfield aspect of the project... Hence, a bit of a downward trend on the revenue guidance that we are giving on this project for this financial year.

Reveals ongoing challenges with a flagship project, leading to a downward revision of FY26 revenue expectations for CSMT, impacting overall revenue guidance.

Asked by Vaibhav Shah

Sustainability of Double-Digit EBITDA Margins Direct
The world has moved on. It's changed a lot pre-COVID, post-COVID, I do not see 12%, 13% margins happening in the near future. It's taken an enormous amount of effort to even get back to double-digit margins, right? While the industry is sort of booming... there are myriad problems which afflict this industry, primarily our overdependence on labor, right? That continues to be the case, and labor is in extremely short supply.

Clarifies that while double-digit margins are sustainable, historical high margins are unlikely due to structural industry changes and labor challenges, setting realistic investor expectations.

Asked by Agastya Dave

Mobilization Advance Growth and Interest-Bearing Component Direct
the mobilization advance from the public sector side on government projects is interest-bearing, which we are continuously reducing our dependence on. The increase in mobilization advance which you see is from the private sector side, which is interest-free.

Addresses concerns about increasing mobilization advances by differentiating between interest-bearing (public sector, being reduced) and interest-free (private sector, increasing), clarifying its impact on finance costs.

Asked by Aarohi Gourisaria

2 min read 6 chapters

Detailed narrative

Q4 & FY25 Financial Performance Overview

Ahluwalia Contracts reported a Q4 FY25 turnover of ₹1,215.84 crores, a 4.48% increase year-on-year. PAT, excluding exceptional items, saw a significant 51.44% growth to ₹83.16 crores, with the EBITDA margin improving to 10.17% from 8.96% in Q4 FY24. For the full fiscal year FY25, turnover grew by 6.31% to ₹4,098.62 crores, although PAT (excl. exceptional items) declined by 12.62% to ₹201.51 crores, and the EBITDA margin stood at 8.34%.

Robust Order Book and Inflow

The company's order book as of March 31, 2025, remained strong at ₹15,775.08 crores, providing revenue visibility for the next two to two and a half years. FY25 saw a healthy order inflow of ₹8,436.69 crores. Additionally, the company is L1 in two projects aggregating ₹1,796 crores, including a ₹1,000 crore university project in Bhubaneshwar and a ₹700 crore MIDC project in Mumbai, with Letters of Award expected within 30-45 days.

FY26 Outlook and Growth Drivers

Management guided for approximately 15% revenue growth in FY26, with a targeted order inflow of ₹7,000-8,000 crores. They anticipate sustaining double-digit EBITDA margins, driven by the execution of new, higher-margin orders and the resolution of past slow-moving projects. Capex for FY26 is projected at around ₹200 crores, primarily for specialized machinery for high-rise building projects.

Working Capital and Financial Health

Working capital days are expected to remain similar to the current 88 days in FY26. The interest-bearing component of mobilization advance has reduced from 58% last year to 40% in FY25, with the increase in total mobilization advance (₹639 crores in FY25) primarily coming from interest-free private sector projects. Trade receivables stood at ₹785 crores in FY25, and unbilled revenue was ₹390 crores.

Key Project Updates and Challenges

The CSMT railway station project's FY26 revenue guidance was revised downwards to ₹400-500 crores (from an earlier ₹750 crores) due to ongoing design issues and phased work approvals, with completion expected in 2-2.5 years. The Gems and Jewellery Park project is awaiting clearances, likely to start in Q3 FY26. Other projects like DLF (housing and commercial), Signature Global, and Tata Memorial are progressing with steady or increasing monthly run rates.

Industry Dynamics and Risks

Management highlighted labor availability and wage inflation as a significant challenge, especially with skilled workforce from Bihar potentially impacted by upcoming elections. While historical EBITDA margins of 12-13% are not expected in the post-COVID era, the company is confident in sustaining double-digit margins by passing on costs, aided by a scarcity of large, quality construction companies in the private sector. NGT issues are expected to have a lesser impact this year.

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