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Afcons’ turnaround falters as payment delays and labor issues squeeze margins
Q1FY27 EBITDA margin contracted to 9.6% from 13.0% a year earlier, while profit after tax fell to ₹30 crore from ₹137 crore.
Afcons Infrastructure’s turnaround narrative is running into execution headwinds, with payment delays and labor availability issues weighing on profitability and slowing revenue conversion, according to LiveMint Markets.
The company reported total income of ₹2,727 crore for Q1FY27, down from ₹3,419 crore in the year-ago quarter. EBITDA margin narrowed to 9.6% from 13.0%, and profit after tax declined to ₹30 crore from ₹137 crore.
LiveMint Markets said investors have already priced in the near term pressure, with the stock down about 30% so far this year and down 41% since its November 2024 listing. The article also cited deteriorating cash flow conditions over the past two years, including negative operating cash flows and higher borrowings used to fund capex, operations, and financing costs.
Despite a record order book of about ₹43,300 crore and potential medium term recovery tied to improved execution, analysts highlighted that near-term guidance gaps and margin pressure remain key risks. Over FY26 to FY29, one set of projections cited by LiveMint Markets calls for 10% revenue CAGR, 13% EBITDA CAGR, and 18% net profit CAGR, with the recovery expected to be back-ended.