Artefact Projects Q1 Results: Net profit rises 7% QoQ to ₹94.30 Lakhs
Artefact Projects Ltd reported a net profit of ₹94.30 Lakhs for Q1FY27, up 9.5% sequentially but down 7.4% year-on-year. Revenue from operations grew 43.2% YoY to ₹316.71 Lakhs, though a new accounting policy deferred ₹517.82 Lakhs of revenue as work in progress pending client approvals from NHA and PWD.
*this image is generated using AI for illustrative purposes only.
Artefact Projects reported a net profit of ₹94.30 Lakhs for the first quarter of FY27 (Q1FY27), ending June 30, 2026. This represents a 9.5% sequential increase from the ₹86.14 Lakhs posted in the fourth quarter of FY26 but a 7.4% decline year-on-year from the ₹101.81 Lakhs recorded in Q1FY26. The Board of Directors approved the unaudited financial results on August 11, 2026, following a limited review by statutory auditors Naresh Patadia & Company.
The most significant operational development this quarter was a change in accounting policy regarding revenue recognition. Artefact Projects now accounts for receipts on an accrual basis only after receiving formal approval and acceptance from clients, primarily the National Highways Authority of India (NHA) and Public Works Department (PWD). Consequently, while services billed amounted to ₹396.21 Lakhs, proforma invoices worth ₹517.82 Lakhs remained unbilled and were classified as work in progress. This conservative approach reduced reported sales by ₹517.82 Lakhs and profits by ₹213.19 Lakhs compared to prior recognition methods.
Financial Performance Overview
Revenue from operations (net of GST) stood at ₹316.71 Lakhs, down 7.5% from ₹221.14 Lakhs in the corresponding quarter of the previous year? No, it is up from ₹221.14 Lakhs in Q1FY26. Wait, the table shows:
- Q1FY27 (Jun 2026): 316.71 Lakhs
- Q1FY26 (Jun 2025): 221.14 Lakhs
- Q4FY26 (Mar 2026): 1,432.55 Lakhs
Correction: Revenue rose 43.2% year-on-year from ₹221.14 Lakhs in Q1FY26 to ₹316.71 Lakhs in Q1FY27. However, it dropped sharply from the peak of ₹1,432.55 Lakhs in the preceding quarter. Total income from operations was ₹380.73 Lakhs, supported by other income of ₹64.02 Lakhs.
| Metric | Q1FY27 (₹ Lakhs) | Q4FY26 (₹ Lakhs) | Q1FY26 (₹ Lakhs) | YoY Change | QoQ Change |
|---|---|---|---|---|---|
| Revenue from Operations | 316.71 | 1,432.55 | 221.14 | +43.2% | -77.9% |
| Other Income | 64.02 | 41.05 | 130.52 | -50.9% | +56.0% |
| Total Expenses | 254.12 | 1,368.70 | 217.22 | +17.0% | -81.4% |
| Net Profit | 94.30 | 86.14 | 101.81 | -7.4% | +9.5% |
| EPS (Basic) | ₹1.30 | ₹1.29 | ₹1.40 | -7.1% | +0.8% |
Expenses totaled ₹254.12 Lakhs, driven primarily by employee costs of ₹295.11 Lakhs and project site expenses of ₹121.21 Lakhs. Notably, the "Change in Inventories of Work in Progress" showed a credit of ₹(304.63) Lakhs, reflecting the addition of unbilled work to inventory rather than expensing it immediately. Retainers and consultancy fees decreased significantly to ₹58.92 Lakhs from ₹262.57 Lakhs in the previous quarter.
What the Numbers Show
The divergence between billed revenue (₹396.21 Lakhs) and recognized revenue (₹316.71 Lakhs) highlights the impact of client approval delays on cash flow visibility. While the company maintains that investments of ₹5.01 Lakhs in Shri Ram Urban Co-operative Bank Ltd and ₹3.51 Lakhs in Shri Anand Nagari Sahakari Bank Ltd are fully recoverable without impairment provisions, the shift to accrual-based recognition upon client acceptance introduces a lag in top-line reporting. This suggests that underlying demand may be stronger than the P&L indicates, but liquidity realization is tied to bureaucratic clearance cycles from government clients like NHA and PWD.
The statutory auditors, Naresh Patadia & Company, issued an unmodified review report under Standard on Review Engagements (SRE) 2410. The results were prepared in accordance with IND AS 34 and Regulation 33 of the SEBI Listing Regulations. The trading window remains closed for 48 hours from the publication of these results.
Historical Stock Returns for Artefact Projects
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.43% | +0.11% | -0.71% | -15.08% | -22.06% | +21.84% |
How will the shift to accrual-based revenue recognition upon client acceptance impact Artefact Projects' cash flow cycles and working capital requirements in subsequent quarters?
What is the expected timeline for the conversion of the ₹517.82 Lakhs in unbilled proforma invoices into recognized revenue, and how might this affect Q2FY27 top-line growth?
Given the significant decline in retainers and consultancy fees, is Artefact Projects diversifying its revenue streams beyond government highway projects to mitigate bureaucratic delays?
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