Afcons Infrastructure , a leading player in India's infrastructure sector, has kicked off the fiscal year with a robust financial performance in the first quarter. The company reported significant growth across key financial metrics, showcasing its resilience and operational efficiency in a dynamic market environment.

Financial Highlights

AFCONS Infrastructure posted impressive year-on-year growth in its Q1 results:

• Total Income reached ₹3,419.00 crore, marking a 6.4% increase from ₹3,213.00 crore in the same quarter of the previous year.
• EBITDA surged by 19.6% to ₹445.00 crore, compared to ₹372.00 crore in the same quarter last year.
• EBITDA margin expanded to 13.0% from 11.6%, reflecting improved operational efficiency.
• Profit After Tax (PAT) showed remarkable growth, jumping 50% to ₹137.00 crore from ₹92.00 crore.
• PAT margin improved to 4.0%, up from 2.9% in the corresponding quarter of the previous fiscal year.

Order Book and Business Outlook

The company's order book remains robust, standing at ₹35,311.00 crore as of June 30. This excludes L1 projects worth ₹21,556.00 crore, indicating a strong pipeline of future projects. The book-to-bill ratio of 2.6x provides healthy revenue visibility for the coming quarters.

In Q1, AFCONS secured new orders worth ₹1,093.00 crore. Notably, the company has made significant inroads into the European market, emerging as L1 in multiple large orders in Croatia in July, valued at ₹11,321.00 crore.

Key Project Milestone

A significant highlight of the quarter was the inauguration of the Chenab Railway Bridge, part of the Udhampur–Srinagar–Baramulla Rail Link. This engineering marvel, constructed by AFCONS, stands as the world's highest single-arch railway bridge. The company's contribution to this project of national importance includes:

• Construction of 17 critical railway bridges, in addition to the Chenab Bridge.
• Completion of 13 complex tunnels in the Katra–Laole section, spanning 36.3 km in challenging geological conditions.
• Building 8.2 km of India's longest transportation tunnel, which measures 12.75 km in total length.

Management Commentary

Mr. Subramanian Krishnamurthy, Executive Vice Chairman (Whole-time Director) of AFCONS Infrastructure, commented on the results: "AFCONS Infrastructure has started the new financial year with a positive set of results. We have delivered good growth in our profitability metrics. Our sustained efforts to enter European markets have borne fruit with us becoming L1 in multiple large orders in Croatia. This aligns with our strategy of focusing on large orders and expanding our presence in overseas markets."

He added, "We are excited by the growth opportunities available both domestically and internationally. We believe that our consistent financial performance, including a sturdy margin profile, positions us well to deliver value to our shareholders. We will continue to remain disciplined in our bidding and financing decisions while focusing on growth."

Conclusion

AFCONS Infrastructure's strong Q1 performance, characterized by significant growth in profitability and a healthy order book, sets a positive tone for the fiscal year. The company's strategic focus on large-scale projects and international expansion, particularly in Europe, indicates a clear growth trajectory. As AFCONS continues to leverage its engineering expertise in complex infrastructure projects, it remains well-positioned to capitalize on the growing infrastructure development opportunities both in India and abroad.

Afcons Infrastructure , a part of the Shapoorji Pallonji group, saw its shares climb 3.7% to Rs 434.45 following a significant contract win in Croatia. The company has emerged as the lowest bidder for a major railway project, marking a substantial international expansion.

Croatia Railway Project Details

Afcons Infrastructure has been declared the Lowest Bidder (L1) by HŽ Infrastruktura d.o.o. for a railway line rehabilitation and construction project in Croatia. The contract, valued at €677,071,899.78 (approximately Rs 6,800.00 crore) excluding VAT, involves:

• Reconstruction of existing track
• Construction of a second track on the Dugo Selo - Novska railway line
• Overhead electrification
• Signalling and telecommunication works

The project has a completion timeline of 72 months from the commencement date.

Stock Performance and Analyst Outlook

Despite the recent 3.7% gain, Afcons Infrastructure's stock has experienced a decline over the past six months:

However, analysts maintain a positive outlook on the stock:

• Current rating: Strong Buy
• Average target price: Rs 543.00
• Potential upside: 30% from current levels

Credit Rating Withdrawal

In a separate development, Afcons Infrastructure has withdrawn its credit ratings for bank facilities from ICRA Limited. The withdrawal process includes:

• Received no-objection certificates from most bankers
• Pending completion of documentation with Bank of Baroda
• ICRA to withdraw ratings in line with its policy upon completion of required documentation

Company Outlook

The significant contract win in Croatia demonstrates Afcons Infrastructure's capability to secure large international projects. This €677 million project not only adds substantially to the company's order book but also expands its global footprint in the infrastructure sector.

While the stock has faced some pressure in recent months, the new contract and analysts' positive outlook suggest potential for recovery. Investors and market watchers will likely keep a close eye on the company's execution of this project and its impact on future financial performance.