As per the source, India’s civil construction sector is experiencing rapid growth, poised to reach $1.4 trillion by 2025. Contributing 9% to India’s GDP, it employs approximately 71 million people. The government’s infrastructure push, with a capital expenditure of $133 billion in fiscal year 2024-25, drives expansion in logistics, warehousing, and real estate
With a market capitalization of Rs 16,807.76 crore, the shares of Afcons Infrastructure Ltd were trading at Rs 457.00 per share, increasing around 0.24 percent as compared to the previous closing price of Rs 458.10 apiece.
Brokerage Recommendations
Elara Capital, one of the well-known brokerages in India, gave a ‘Buy’ call on the infra stock with a target price of Rs 617, indicating a potential upside of 35 percent from Thursday’s price of Rs 457 per share.
Rational
As of September 2024, Afcons’ total order book stood at approximately ₹34,152 crore. The company has demonstrated strong performance, securing order inflows of ₹15,900 crore in FY25 YTD, which includes ₹10,700 crore in L1 orders. This positions them well to meet their full-year inflow guidance of ₹25,000 crore, supported by a robust order pipeline of ₹3.2 lakh crore.
Elara Capital projects promising growth rates for Afcons, including a revenue CAGR of 12%, an EBITDA CAGR of 14%, and an earnings CAGR of 26% over FY24-27E2. This is due to the company’s track record, efficient capital allocation, and superior margins, presenting a low-risk investment with elevated growth expectations
Financial performance
Looking into Afcons Infrastructure Ltd’s performance, revenue plummeted by 11 percent from Rs 3,334 crore in Q2FY24 to Rs 2,960 crore in Q2FY25. During the same duration, net profit climbed by 30 percent from Rs 104 crore to Rs 135 crore.
Recent Developments
Recently, the company received a prestigious work order worth Rs 1,007 crore for the construction Package BH-05 of the Bhopal Metro Phase 1 project’s 12.915 km Blue Line (Line-2) which will connect Bhadbhada Chauraha – Ratnagiri Tiraha via 13 elevated stations, this order received from Madhya Pradesh Metro Rail Corporation Ltd.
Also read…..
Upcoming Projects and Opportunities
The company has a robust urban infrastructure pipeline, targeting a ₹3.2 lakh Cr market, including key underground and elevated metro projects. With strong revenue visibility for FY26, it expects 20-25% growth, positioning itself for significant opportunities in the coming years.
Sector Growth Prospects
India’s construction market is set to grow rapidly, reaching ₹38.5 trillion by FY28, with a CAGR of 10% from FY23 to FY28. This growth is fueled by increased government infrastructure spending, positioning India as the fastest-growing construction market globally.
Operational Strategies
The company prioritizes sustainable, profitable growth by aligning its order book with execution capacity, optimizing costs, and enhancing efficiencies. It focuses on selecting high-margin projects, with an average order size exceeding ₹1,500 Cr, ensuring strong financial performance and project success.Margin Guidance
Management targets a sustainable EBITDA margin of 11-12%, driven by operational excellence and cost containment. Despite challenges, margins are expected to remain stable, with a focus on enhancing project performance through technology and knowledge management to support continued growth and efficiency.
Company profile:
Afcons Infrastructure operates across five key infrastructure sectors. The marine and industrial segment handles projects related to ports and harbor jetties, dry docks, wet basins, breakwaters, outfall, and intake structures, liquefied natural gas tanks, and material handling systems.
Written by:- Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
