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    AVP Infracon

    AVPINFRA
    Construction·23 May 2026
    Management Summary

    AVP Infracon reported a turnover of approximately ₹440 crores for FY26, with PAT and EBITDA margins compressing by 1-2% due to geopolitical factors, bitumen price hikes, and increased finance costs. The company aims for ₹700 crores revenue in FY27, supported by a ₹500 crore unexecuted order book. Management acknowledged negative operating cash flow, high receivables, and increased debt, but expressed confidence in future equity raises and operational improvements to restore margins and cash flow.

    Highlights

    5

    • Achieved turnover of approximately ₹440 crores for FY26, with ₹80 crores of unbilled revenue.

    • Targeting a revenue of ₹700 crores for FY27, indicating strong growth ambition.

    • Current unexecuted order book is around ₹500 crores, providing future revenue visibility.

    • Management is committed to maintaining PAT margins of 9-10% and EBITDA margins above 20% in the future.

    • Successfully secured BBB+ credit rating, up from BBB, which aids in debt financing.

    Concerns

    5

    • PAT and EBITDA margins compressed by 1-2% in FY26 due to geopolitical war, bitumen price hikes (50-60%), and increased finance costs.

    • Unbilled revenue of ₹80 crores could not be recognized as sales, impacting PAT margin.

    • Finance costs increased due to higher debt taken to achieve turnover targets amidst share price fall and delayed QIP plans.

    • Cash flow from operations has been negative for the last three years, with FY26 also being negative, primarily due to high receivables and the need to fund growth.

    • Receivables increased, with ₹160 crores outstanding, although ₹55-60 crores were collected in April/May.

    Key financials

    Metrics

    7

    Periods

    2

    Headline

    6
    • Turnover
      ₹440 Cr
    • PAT Margin
      —
    • EBITDA Margin
      19.3%
    • Unbilled Revenue
      ₹80 Cr
    • Trade Receivables
      ₹160 Cr

    FY26

    1
    • Capex
      ₹25 Cr

    Order Book

    high confidence

    Total Value

    ₹ 500 crores

    as of 2026-05-23

    quantified

    Composition

    Tamil Nadu(geography)
    ₹ 700 crores100.0%

    Pipeline

    other

    Tenders floated in May/June, NHAI projects, other tenders from June onwards

    "The company has an unexecuted order book of around ₹500 crores and is actively bidding for new projects, aiming to increase the order book to support future growth. All current committed orders are within Tamil Nadu, but the company is also bidding outside the state."

    Source:
    Q&A

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹25 crores

    Term loans from banks

    Debt

    Gross ₹234 crores

    Liquidity

    Undrawn ₹85 crores

    Company has ₹140 crores in fund-based limits (CC limit) and ₹85 crores in non-fund based limits (BGLC). Only ₹15-20 crores of BGLC is utilized, with the rest unutilized. Banks are expected to increase CC limits as turnover grows.

    Guidance & targets

    7
    CategoryTargetPriority
    Revenue
    Revenue Target
    ₹700 crores
    		High
    Profitability
    PAT Margin
    9-10%
    		High
    Profitability
    PAT Margin
    10% minimum
    		High
    Profitability
    EBITDA Margin
    20% and above
    		High
    Debt
    Debt-to-Equity Ratio
    below 1.5
    		High
    Order Book
    Order Book Kitty
    ₹500-1000 crores
    		Medium
    Receivables
    Trade Receivables
    below 15% of top line
    		Medium

    Equity Raise Completion

    H1 FY27
    CurrentPlanned for H1 FY27
    TargetSuccessful completion of equity raise

    Why it matters

    Crucial for debt reduction and funding future growth without relying solely on debt.

    Priyanka Singh: Sir, I'll reply, it's okay. Actually, you know that we are planning to go for this equity raise soon, once the share market is a little better, and prices are better. I think by the half-yearly, once we declare our results, post that, we will be going for an equity raise. So once this equity raise is done, whatever funds we have taken as debt, as of now, are there, which is like a bridge funding for us.

    How to verify

    capital_allocation.debt.actions

    Risks & concerns

    5
    RiskSeverity

    Bitumen price escalation and unavailability

    Geopolitical war led to 50-60% bitumen price hike and unavailability, impacting margins and operations. Mitigation includes low reliance on bitumen for current order book and discussions for alternative grades (VG30). — Management acknowledged

    high

    Increased finance costs

    Higher debt taken to achieve turnover targets due to delayed QIP and share price fall, leading to increased finance costs and margin compression. Plan to reduce debt post-equity raise. — Management acknowledged

    medium

    Negative cash flow from operations

    Cash flow from operations has been negative for the last three years, primarily due to high receivables and funding growth. Management aims to achieve positive cash flow in the next financial year. — Analyst acknowledged

    high

    High trade receivables and delayed collections

    Trade receivables stood at ₹160 crores, partly due to election-related delays. Management expects receivables to normalize and aims to keep them below 15% of the top line. — Management acknowledged

    medium

    Share price volatility impacting equity raise

    Low share prices due to market volatility delayed QIP plans. Management is confident prices will recover and plans to proceed with equity raise and warrant conversion. — Management acknowledged

    medium

    Q&A highlights

    8

    “Priyanka Singh: There are about 3 factors this time which has affected PAT and EBITDA. And to begin with, we all know that because of this geopolitical war, bitumen prices went up. It happened only for 1 month, but that also took a toll. Other than that, we were actually planning to go for QIP in the month of September or October. But because of this crisis, our share prices fell, so promoters decided not to dilute shares. So, in order to achieve around INR440 crores of turnover, they have actually gone to banks and taken debt and other things to ensure that our turnover is there. Therefore, finance costs also went a little high compared to the last financial year. Other than that, I want to just say that because in the month of March, we have the maximum billing. We have a high unbilled revenue of around INR80 crores, which we couldn't bill during February and March.”

    Explains the reasons for margin compression, including external factors (geopolitical, bitumen prices), internal strategic decisions (delayed QIP, debt for turnover), and operational issues (unbilled revenue).

    asked by Raghav from R21 Ventures

    2 min read6 chapters

    Detailed Narrative

    01

    FY26 Performance and Margin Compression

    AVP Infracon achieved a turnover of approximately ₹440 crores for FY26. However, PAT and EBITDA margins experienced a compression of 1-2%. This was primarily attributed to three factors: the geopolitical war leading to a 50-60% increase in bitumen prices, the decision to defer a planned QIP due to falling share prices, which necessitated taking on more debt and thus increasing finance costs, and a significant unbilled revenue of ₹80 crores that could not be recognized as sales by the end of March 2026.

    02

    Future Outlook and Growth Targets

    The company has set an ambitious revenue target of ₹700 crores for FY27, a significant increase from the current ₹440 crores. Management expressed confidence in achieving this target, supported by a current unexecuted order book of approximately ₹500 crores. They aim to maintain PAT margins between 9-10% and achieve EBITDA margins of 20% and above in the coming year, despite the challenges faced in FY26.

    03

    Debt Management and Funding Strategy

    Consolidated debt stands at ₹234 crores, with standalone debt at ₹206 crores. This includes ₹140 crores in CC limits, ₹15-18 crores in interest-free loans from promoters, and ₹48-50 crores in term loans, of which ₹32 crores are short-term. The company plans to reduce its debt levels following an anticipated equity raise in the first half of FY27. Additionally, the Managing Director has subscribed to warrants worth ₹30 crores, with ₹7.5 crores already invested, further demonstrating commitment to infusing capital.

    04

    Working Capital and Receivables Challenges

    The company's cash flow from operations has been negative for the past three years, including FY26. This is largely due to high trade receivables, which stood at ₹160 crores, with ₹55-60 crores collected in April and May. Management noted that election-related delays contributed to slower receivables. To improve the working capital cycle and reduce inventory days, the company plans to adopt Ind AS, which will allow unbilled revenue to be recognized as sales.

    05

    Raw Material Volatility and Mitigation

    The significant increase in bitumen prices (50-60%) due to geopolitical tensions posed a major challenge. However, management highlighted that only 10-20% of their current ₹500 crore order book involves bitumen, with ₹300-350 crores being concrete-based. They are also in discussions with NHAI and state officials to allow the use of VG30 bitumen, which is more readily available and cost-effective, to mitigate future price and supply risks.

    06

    Diversification and New Business Segments

    AVP Infracon is actively pursuing diversification into solar EPC and pre-engineering building (PEB) segments. While they have secured their first solar EPC order and are bidding for more, the PEB segment is still in its early stages, with the company focusing on smaller projects to build qualification. The company is also looking to expand its network outside Tamil Nadu, having started bidding in other states, though no positive outcomes have been reported yet.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.