Afcons Infrastructure Ltd

Arbitration Award Update

• Arbitral Tribunal awarded Afcons ₹335.50 crore in its favour against UPEIDA.
• Total award of ₹335.50 crore comprises ₹152.25 crore principal plus ₹183.25 crore interest.
• Payment is subject to counterparty not challenging the award within the legal period.
• Positive impact expected on Afcons' financial position.

Rating actions

• Long-term bank facilities rating downgraded to AA-/Negative from AA-/Stable.
• Non-Convertible Debentures rating downgraded to AA-/Negative from AA-/Stable.
• Commercial Paper Programme reaffirmed at CRISIL A1+.

Agency and outlook

• Rating agency: CRISIL Ratings Limited.
• Outlook updated to Negative for LT facilities and NCDs; CP remains at A1+.

Material change

• Outlook changed from Stable to Negative on LT/NCD ratings.

Financial Performance

• Q1 FY27 total income ₹2,727 crore, down from ₹3,419 crore in Q1 FY26.
• EBITDA ₹263 crore, margin 9.6% for the quarter.
• PAT ₹30 crore; PBT ₹51 crore; weaker due to lower turnover.
• ₹57 crore other operating income included; TBM depreciation largely absent this quarter.
• End-Q1 order book ₹43,290 crore; Q1 inflows ₹13,219 crore.
• FY27 YTD orders booked ₹15,695 crore; pending book over ₹45,000 crore.
• Overseas revenue share was 16% in Q1; domestic 84%.
• Capex in Q1 ₹150 crore; FY27 capex guidance ₹700–800 crore; FY28 ₹600–650 crore.
• Net debt to equity around 0.68x; debt-related pressures influenced by capex funding.

Operating Update

• Mumbai-Ahmedabad HSR TBM drives commenced; main tunneling to start in coming months.
• Croatia railway is the largest single order; Vadhvan port breakwater opportunity.
• Overseas projects tend to yield higher margins; delta of 200–300 bps vs domestic.
• Bid pipeline remains robust: ₹1.5 lakh crores for 9 months; ₹3.96 lakh crores long-term.
• Geopolitical uncertainty weighing award activity; momentum expected as uncertainties ease.

Balance Sheet and Cash Flow

• Net working capital elevated due to project funding and certification delays.
• Cash flow from operations negative in Q1, typical due to March-year-end payments.
• Capex payments contributed to higher debt in the quarter.
• Tax rate elevated due to JV and overseas entity contributions.
• Collections and stuck receivables expected to improve gradually through year.

Projects and Capex

• Q1 capex about ₹150 crore; CWIP around ₹900 crore.
• TBM depreciation expected to rise in H2 as TBMs capitalize.
• Croatia turnover expected to be minuscule this year; Vadhvan geotech/design work this year.
• Strategic equipment base around ₹4,300 crores; selective, high-utilization investments.

Guidance and Q&A

• FY27 full-year order inflow guidance ₹30,000 crore; execution ramp expected in H2.
• Pipeline supports steady growth; Q&A indicates ramp in Q3/Q4 and FY28 strength.
• Overseas revenue target around 30% again as order book diversifies.
• Net debt target discussed: around ₹2,700–₹2,800 crores; capex pacing outlined.

Meeting Details

• Date and time: August 10, 2026 at 11:00 IST.
• Type: earnings conference call.
• Recording: audio recording uploaded on Afcons website.

Purpose

• Purpose: discussion of Q1 FY27 earnings results with investors.

Business Overview

• Core EPC contractor across Urban Infra, Surface Transport, Hydro & Underground, Marine, and Oil & Gas.
• Global footprint in 31 countries; emphasis on extreme engineering and knowledge management.
• Strong order book and strategic bid pipeline to support growth.

Operational Highlights

• Q1 FY27: total income ₹2,727 Cr; EBITDA ₹263 Cr; PAT ₹30 Cr.
• Order book ₹43,290 Cr; order inflow ₹13,219 Cr in Q1 FY27.
• Bid pipeline FY27 ₹150,681 Cr; book-to-bill 3.8x.
• Urban Infra 37%, Surface Transport 24%; Marine & Industrial 22%; Hydro & Underground 16%; Oil & Gas 1%.

Financial Performance

• Q1 FY27 revenue from operations ₹2,671 Cr.
• Total income ₹2,727 Cr; YoY -20.3%.
• EBITDA ₹263 Cr; EBITDA margin 9.6%.
• EBIT ₹179 Cr; EBIT margin 6.6%.
• PAT ₹30 Cr; PAT margin 1.1%.
• ROCE 7.7%; ROE 2.2% (Q1 FY27).
• Borrowings ₹3,538 Cr; Cash ₹886 Cr; Net debt to equity 0.7x.
• FY26: Total equity ₹5,451 Cr; Total assets ₹19,131 Cr; Liabilities ₹13,680 Cr.

Capital Structure & Liquidity

• Crisil upgraded long-term rating to AA-/Stable; short-term A1+.
• Borrowings up to ₹3,538 Cr; liquidity supported by ₹886 Cr cash.

Strategic Outlook & Growth

• Strategy: sustainable profitable growth by matching order book with capacity and controlling costs.
• FY27 bid pipeline ₹150,681 Cr; diversified across segments.

Risks & Mitigation

• Macro/market risk from economy performance globally and domestically.
• Execution risk, cost overruns, and competitive pressure.
• Mitigation: robust contracts management system and risk governance.

Governance & Leadership

• Chairman Emeritus: Shapoorji Pallonji Mistry; Executive Chairman: Subramanian Krishnamurthy.
• MD: Srinivasan Paramasivan; Independent Directors include Atul Sobti, Anurag Sachan, Sitaram Kunte, Rukhshana Mistry.

Overview

• Q1 FY27 total income ₹2,727 Cr; EBITDA ₹263 Cr; PAT ₹30 Cr.
• EBITDA margin 9.6%; PAT margin 1.1%.
• Q1 FY27 diluted EPS ₹0.82.
• Book-to-bill ratio 3.8x.
• Mumbai-Pune Missing Link bridge inaugurated May 1, 2026.
• Croatia rail project and Vadhavan Port breakwater wins.

Order Book & Segments

• Order book ₹43,290 Cr; pending inflows ₹13,219 Cr.
• Surface Transport 24% of Order Book.
• Marine & Industrial 22%.
• Urban Infra UG & Elevated Metro 21%.
• Hydro & Underground 16%.
• Bridges & Elevated Corridor 16%.
• Oil & Gas 1%.

Outlook

• Management expects stronger execution in H2 FY27.

Key financial results approved

• Unaudited Standalone and Consolidated results for quarter ended 30 June 2026 approved; Limited Review Reports issued.
• Results cover quarter ended June 30, 2026; reviewed by Audit Committee and Board.

Auditor remarks / focus areas

• Audit reports include emphasis of matter on arbitration/high court/supreme court outcome uncertainties; recoverability of claims.
• Joint operations and other claims in arbitration; recoverability considered good but outcome uncertain.
• Notes reference Dahej Standby Jetty Project and KRCL cases with recoverability uncertainties.

Regulatory / compliance notes

• Labour Codes impact estimated at Rs 5.1 crore; presented as Exceptional Item.
• Notes describe ongoing arbitration, High Court and Supreme Court proceedings.

Other actions / board info

• Board meeting held on August 7, 2026; results approved.
• No changes in directors or auditors announced.

Award details

• Awarded by Brihanmumbai Municipal Corporation (BMC) for desalinated water tunnel design and construction.
• Project value ₹1,918 crores, inclusive of GST and O&M.
• Domestic award for a desalinated water conveyance tunnel in Mumbai.
• Scope covers Manori to Charkop, extending to Mahavir Nagar.

CP redemption

• The company fulfilled maturity payment of Rs 50 crore CP due August 5, 2026, ISIN INE101I14EO7.