Акции Afcons Infrastructure упали на 41% из-за проблем с платежами и снижением прибыли

Afcons Infrastructure’s latest quarterly numbers have raised a few red flags for investors. Delays in receiving payments and labour availability issues have weighed on execution and profitability, taking some of the shine off the company’s turnaround story. For now, market participants feel the positives are insufficient to outweigh the challenges, with near-term execution, margin pressure, lack of guidance and analyst downgrades keeping the stock under pressure. The company’s Ebitda margin contracted to 9.6% in Q1FY27 from 13.0% in the corresponding period last year, while profit after tax came in at ₹30 crore, compared to ₹137 crore in the year-ago period. Total income also fell to ₹2,727 crore from ₹3,419 crore. Investors have already priced in the headwinds, analysts said, sending Afcons' stock down about 30% so far this year in anticipation of a weak first half for FY27. It is down 41% since its listing in November 2024 as persistent execution and profitability challenges continue to erode investor confidence. The past two years were particularly difficult from a cash flow perspective, with negative operating cash flows and higher borrowings being used to fund capital expenditure (capex), operations and financing costs, said Bhavin Modi, a research analyst at Anand Rathi Institutional Equities. Back-ended recovery While a robust order book and potential recovery in execution brighten Afcons' medium-term prospects, these strengths aren't enough to outweigh immediate operational risks, according to Ankita Shah, senior vice president at Elara Capital. Shah explained that Afcons' ₹43,290-crore order book, strong order inflows, and project ramp-ups, including the Mumbai-Ahmedabad High-Speed Rail, offer a solid foundation for growth. Over FY26-29, revenue, Ebitda, and net profit are projected to clock a compound annual growth rate (CAGR) of 10%, 13%, and 18%, respectively. However, with recovery heavily back-ended and tied to significant execution gains, she views the medium-term outlook as balanced, but tilted negatively in the near term. She said execution is Afcons’ primary concern, rather than order availability. Around 31% of the order book is slow-moving or at an early execution stage, and land handover delays, labour shortages, cash-flow pressure, delayed payments, slower receivable recovery, clearances and weather disruptions remain execution constraints. Moreover, rising debt, higher capex related to tunnel boring machines, and a 100% promoter pledge exacerbate financial and governance concerns, she added. In February, the Shapoorji Pallonji Group pledged additional shares of Afcons Infrastructure to fund its working-capital needs, bringing the total promoter encumbrance to 100%. Besides these, slow project ramp-ups continue to tie up working capital and delay the conversion of Afcons' robust order book into revenue, Shah noted, maintaining a ‘sell’ rating with a target price of ₹221. Nuvama Institutional Equities has also trimmed its earnings estimates for Afcons. While it continues to view the company as a sterling engineering, procurement and construction (EPC) player, payment issues and execution challenges in a volatile environment have prompted Nuvama to cut its FY27 and FY28 earnings-per-share estimates by 46% and 28%, respectively. The brokerage has retained its ‘buy’ rating on the stock, but lowered the target price from ₹398 to ₹334. All is not lost Despite near-term hurdles, Anand Rathi’s Modi believes Afcons has entered FY27 on a much stronger footing for order inflows. Key project wins include the ₹5,300-crore Vadhavan Breakwater project, the ₹1,100-crore Uganda road contract, the ₹900-crore Pune Metro segment, and a ₹1,600-crore water conveyance tunnel in Mumbai, along with an international railway order in Croatia. “Overall inflows stood at around ₹15,700 crore in Q1FY27, taking the order book to an all time high of around ₹43,300 crore, thereby providing healthy execution visibility over the next three to four years,” he said. Also, management has clearly shifted its focus from aggressive growth towards balance sheet discipline, he added. Execution is being prioritised on projects with better funding and payment visibility, while significant efforts are being directed towards monetisation of receivables and unbilled revenue to improve cash flows and reduce working capital intensity, Modi said. In its conference call with analysts on 10 August, the company reiterated its focus on growing the order book, improving collections, strengthening cash flows and further shoring up its balance sheet. “As execution across our existing projects gathers pace and recently secured orders move into their main construction phases, we expect a gradual improvement in performance over the coming quarters,” the company said. Sizing up the competition “On trailing P/E, Afcons looks expensive versus its peers, but this is largely because near-term earnings have collapsed,” said Shashank Udupa, founder of Vayu Capital and a Sebi-registered investment advisor. Afcons can be compared with L&T, NCC, Kalpataru Projects and Tata Projects, although business mixes differ. Afcons stands out in bridges, tunnels and marine infrastructure, with a strong and diversified order book, he said. On an EV/ebitda basis, Afcons trades at around 9x, making it relatively cheap compared to Kalpataru Projects (around 10.7x) and well below L&T (around 15x). The stock also appears slightly inexpensive on a price-to-book basis. Udupa pointed out that the stock has de-rated sharply, falling about 45% from its 52-week high of ₹479 to around ₹264. He therefore believes the current valuation presents an appealing entry point for long-term investors targeting an FY28 earnings recovery, despite weak near-term performance. Of the analysts tracked by Bloomberg, six maintain a ‘buy’ rating on the stock, three recommend a ‘hold’, and two suggest a ‘sell’.