Ashoka Buildcon

The construction sector experienced muted execution in Q2 FY26 due to extensive monsoon and intense competition. Only 300 kilometers were awarded, while 1,600 kilometers were under construction. Despite this, the industry maintains a robust pipeline, with NHAI tightening contractor eligibilities, favoring larger players. The government plans a massive INR 11 lakh crore investment to expand the high-speed road network, aiming for 17,000 kilometers of access-controlled expressways by 2023. NHAI has signaled an acceleration in awarding for H2 FY26, identifying 124 projects worth INR 2 lakh crores (EPC cost) and INR 3.45 lakh crores (total capital cost), with 72% expected under the HAM model.

Ashoka Buildcon reported a standalone total income of INR 1,303 crores in Q2 FY26, an 11% year-on-year degrowth. Standalone EBITDA remained flat at INR 160 crores, with a margin of 12.3%, an improvement of 130 basis points. Standalone PAT surged by 284% to INR 139 crores. On a consolidated basis, total income was INR 1,908 crores, a 25% degrowth, with EBITDA at INR 642 crores (down 32%) and a margin of 33.6%. Consolidated PAT for the quarter was INR 91 crores. Revenue contribution for Q2 FY26 was led by Road EPC (54.9%), followed by Power T&D (15.3%) and Road HAM (11.8%).

As of September 30, 2025, Ashoka Buildcon's order book stood at INR 14,888 crores. This excludes a new order of INR 468 crores received post-September 30 and a cancelled Kolshet Project of INR 279 crores. During Q2 FY26, the company secured two significant railway contracts from North Western Railway totaling INR 1,039.3 crores. The order book composition is 65.8% Roads and Railways (INR 9,804 crores), 31.0% Power T&D (INR 4,623 crores), and 3.1% EPC Buildings (INR 462 crores). The company is targeting an incremental order inflow of INR 6,000-7,000 crores in H2 FY26, with a bidding pipeline of over INR 80,000 crores.

Ashoka Buildcon successfully completed the sale of 5 HAM SPVs for INR 1,146 crores, reinforcing its focus on value unlocking. The company also increased its stake in Jaora-Nayagaon Toll Road Company Limited by 26% to 61.17% for INR 166.6 crores. Post-September 30, INR 882 crores was utilized from Ashoka Buildcon's cash balance to acquire convertible debentures in Ashoka Concessions Limited. The company plans to monetize 4 more HAM assets by March end for approximately INR 800 crores and 2 by June 2026 end for INR 300 crores. Discussions are ongoing for the monetization of the Chennai ORR project, with a target to sign by March.

Execution in H1 FY26 was impacted by an elongated monsoon season and delays in land acquisition, particularly for projects in Maharashtra. The appointed date for the Guskara HAM project is now targeted for December, but could shift to March if land acquisition (currently 30%) does not reach 80%. The MMRDA's Kolshet Project (INR 279 crores) was cancelled due to a significant change in scope and will be rebid. Other projects like Bankot and Gaimukh are progressing well, while Jaigad and Kolshet are expected to start once forest and mangrove clearances are obtained by December.

Consolidated debt as of September 30, 2025, stood at INR 4,910 crores, with standalone debt at INR 1,362 crores. The standalone debt comprises INR 83 crores of equipment finance, INR 300 crores of NCD, and INR 978 crores of working capital loans. Management expects substantial deleveraging in H2 FY26, driven by the realization of BOT project monetization proceeds. The target is to achieve near-zero standalone debt by year-end, supported by cash balances, with approximately INR 425 crores of outstanding instruments to be liquidated by April.

The company observed an increase in working capital during the first half of the fiscal year. Management indicated that working capital levels are expected to largely remain consistent, with a potential improvement in the power segment by March end due to anticipated release of working capital from employers. This suggests a focused effort on optimizing working capital in specific operational areas.