Afcons Infrastructure Reports First Quarterly Loss Since 2010; FY26 Revenue Declines 5.4% Amid Project Delays and Geopolitical Disruptions

Published at : Sep 04, 2026 09:39 AM (IST)

Total Views : 68

Afcons Infrastructure Reports First Quarterly Loss Since 2010; FY26 Revenue Declines 5.4% Amid Project Delays and Geopolitical Disruptions

The Print Times

Afcons Infrastructure Limited reported a challenging performance for FY26, with the company posting its first quarterly loss since it began publishing quarterly financial results in 2010. Addressing the Q4 FY26 earnings conference call, Mr. Paramasivan Srinivasan, Managing Director, Afcons Infrastructure Limited, described FY26 as one of the most difficult years for the infrastructure sector and acknowledged that the company's performance fell well below expectations.

Apologizing to investors, Mr. Srinivasan said the quarterly loss was an exception and expressed confidence that it would remain a one-time aberration. "I am personally deeply upset with the results," he stated, adding that the company remains confident about returning to its normal performance trajectory.

For FY26, revenue stood at Rs. 12,322 crore, registering a 5.4% year-on-year decline from Rs. 13,023 crore in FY25. The company reported EBITDA of Rs. 1,439 crore, maintaining a healthy EBITDA margin of 11.7%, which management said continues to be among the better margins in the infrastructure industry. Profit after tax (PAT) stood at Rs. 251 crore, after accounting for a one-time provision of Rs. 76 crore arising from the implementation of the new Labour Code. Excluding this impact, PAT would have been Rs. 327 crore.

For the fourth quarter, total income stood at Rs. 2,777 crore, down 18% from Rs. 3,387 crore in Q4 FY25, while EBITDA declined to Rs. 170 crore from Rs. 415 crore in the corresponding quarter last year. The company reported a net loss of Rs. 89 crore during the quarter, impacted by project-specific developments, provisions and one-time factors.

According to the management, FY26 was marked by slower-than-expected order inflows across several infrastructure segments, delays in converting projects from L1 status into confirmed orders, prolonged tender evaluation timelines and execution-related disruptions at certain projects. Revenue was also affected by continued liquidity constraints at the client level, which slowed project execution for longer than anticipated.

The company further noted that several overseas projects experienced temporary disruptions during the fourth quarter due to geopolitical developments. In addition, some projects scheduled to ramp up during Q4 were delayed because of design modifications and alignment changes. Management emphasized that these issues were largely timing-related and external in nature rather than structural concerns regarding the company's execution capabilities.

Despite these challenges, Afcons achieved several important milestones during the year. The company commissioned the HRRL crude oil terminal project at Mundra, part of one of India's largest integrated refinery and petrochemical complexes, strengthening its capabilities in industrial and energy infrastructure.

Afcons also witnessed the operationalization and inauguration of multiple infrastructure projects during FY26, including sections of the Bangalore Double-Decker Metro and Flyover Corridor, executed in one of the city's busiest live traffic environments with minimal disruption. Successful trial runs were conducted on the Agra Metro and Kanpur Metro projects, while the Delhi-Meerut RRTS Corridor, where Afcons executed two packages, became fully operational.

The company's engineering capabilities also received international recognition during the year. Engineering News-Record (ENR), USA, ranked Afcons 8th globally in the Marine category and 12th among International Bridge Contractors, reinforcing its expertise in executing technically complex infrastructure projects. Afcons also received the prestigious MIKE Award for the eighth consecutive year, marking its tenth overall recognition under the MIKE and MAKE awards for institutionalizing knowledge management and innovation practices.

On the project development front, the company announced that it had received a proposal for the rehabilitation and construction of a railway line project in Croatia, where it had earlier been declared the lowest bidder (L1), with formalities expected to conclude shortly. However, two Croatia road projects, where Afcons had also emerged as L1, were cancelled by the client due to budgetary constraints.

Providing an update on the Mumbai-Ahmedabad High-Speed Rail C2 project, the management said the second consignment of the tunnel boring machine, which had been delayed for several months, has now reached the project site. Assembly work is progressing well, with the main drive already lowered into the shaft, and tunnelling operations are expected to commence before the end of the next quarter.

During FY26, Afcons secured new orders worth Rs. 4,125 crore, excluding approximately Rs. 3,800 crore in variation and change orders on existing projects. Management stated that order inflows remained below earlier expectations due to deferred awards of several large projects and delays in converting L1 positions into confirmed contracts, particularly during the fourth quarter.

The company noted that in the current financial year it has already booked around Rs. 8,000 crore worth of new orders and has been declared L1 in projects valued at another Rs. 7,000 crore, with these orders expected to be converted into firm contracts during the current quarter.

Looking ahead, Afcons said its addressable project pipeline remains strong across transportation, marine, underground, hydro, water and industrial infrastructure segments. With visibility of around Rs. 15,000 crore in confirmed and L1 orders during the current financial year, the company expects to secure an additional Rs. 15,000 crore, resulting in a total order booking guidance of Rs. 30,000 crore for FY27.

However, management refrained from providing specific revenue growth or EBITDA margin guidance for FY27, citing continued geopolitical uncertainty, elongated project award cycles and ongoing project-related developments.

Explaining the weaker fourth-quarter performance, the company highlighted delays in customer payments, which created working capital constraints and affected project execution. Afcons said it consciously limited project funding to avoid overexposure to customers, which in turn restricted revenue recognition on certain projects. Overseas operations were also impacted by war-related disruptions, including Petroleum, Oil and Lubricants (POL) supply issues, gas availability challenges and logistics disruptions.

Traditionally, the fourth quarter delivers 15-20% higher revenue than the second and third quarters due to smoother customer payments and improved operating leverage. However, management noted that FY26 experienced the opposite trend, significantly impacting profitability during both the quarter and the full financial year.

Summarizing the year's performance, Mr. Srinivasan said payment delays, slower conversion of L1 orders, postponement of fast-track projects and geopolitical developments were the primary factors affecting revenue growth. Despite the difficult operating environment, he reiterated confidence in Afcons' long-term fundamentals, supported by its diversified project portfolio, strong execution capabilities, healthy opportunity pipeline and disciplined approach to growth.
 

Published at : Sep 04, 2026 09:39 AM (IST)

Total Views : 68