Afcons Infrastructure Ltd (₹423): Engineering India’s Future, Quietly.

~Sumon Mukhopadhyay.

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Afcons Infrastructure Ltd (Rs.423), the engineering and construction flagship of the Shapoorji Pallonji Group, continues to deliver high-impact infrastructure across geographies—from metro tunnels to marine terminals—without much noise. Photo: Upstox.

Its execution-first ethos and global footprint make it a standout in India’s EPC landscape.

FY26 Snapshot (Q1: June 2025):

- Revenue: ₹3,370 crore.

- Operating Profit: ₹435 crore.

- EBITDA: ₹484 crore 

- Net Profit: ₹137 crore. 

- EPS: ₹3.74.

- Operating Margin: 12.9%.

- Book Value: ₹143.03.

- Current Ratio: 1.36.

It has robust financials and consistent execution—ICRA rating: Long-term “A+”, Short-term “A1”.

Recent Positives:

Big Ticket Wins: 

July 2025 saw Afcons emerge as the lowest bidder for a ₹6,800 crore railway project in Croatia—boosting international credentials and nudging the stock ~4% higher.

Domestic Muscle: 

In June 2025, it clinched a ₹700 crore order from Reliance Industries for its Dahej vinyl project (stock up ~6% on the news). Earlier in the year, Afcons bagged a ₹1,283 crore marine contract at Tuna Tekra, Gujarat, and secured an LoI worth ₹1,084 crore from DRDO.

PM Gati Shakti 2.0 (2025 Update): 

In Q3 2025, the Indian government enhanced the PM Gati Shakti National Master Plan, allocating an additional Rs. 2 lakh crore (USD 24 billion) for 2026–28 to accelerate multimodal connectivity. This streamlines project approvals, directly benefiting Afcons’ Rs. 6,800 crore Croatia railway project and domestic highway contracts, reducing execution timelines and boosting profitability.

Sagarmala 2.0 and Port Development:

The 2025 expansion of the Sagarmala scheme aims to modernize 15 major ports by 2030, with Rs. 1.5 lakh crore (USD 18 billion) allocated for 2026–30. Afcons’ expertise in maritime projects, evidenced by the Rs. 1,084 crore DRDO maritime facility in Visakhapatnam (completed 2025), positions it to secure high-value contracts in this space.

Infrastructure Budget Hike (2025–26):

The 2025–26 Union Budget increased infrastructure spending to Rs. 12 lakh crore (USD 147 billion), up 8% from 2024–25, prioritizing rail, roads, and metro projects. Afcons’ recent Rs. 1,007 crore Bhopal Metro contract and Rs. 4,535 crore Croatia road projects align perfectly with this policy push.

Strategic Growth Drivers:

Global Footprint: 

It has a strong presence in Africa, Middle East, and South Asia with repeat institutional clients. Afcons’ international projects, including Rs. 700 crore Reliance Industries work in Gujarat and Croatia contracts, enhance its appeal to Canadian and European investors.

Arbitration Success: 

A 2025 arbitration win against Mumbai Port Trust freed capital, strengthening the balance sheet.

Sustainability Edge: 

Green certifications for eco-friendly construction practices align with Europe’s sustainability focus.

Solid Order Book: 

As of mid-2025, the order book stood at a robust ₹36,869 crore (~3.8x book-to-bill ratio), ensuring multi-year revenue visibility.

It has a diversified order book across marine, transport, oil & gas, and urban infra.

Analyst Backing: 

Brokerages including Jefferies and Nomura maintain bullish views—Jefferies forecasting up to 43% upside—while Nuvama initiated coverage with a Buy and ₹535 target, citing consistent growth, solid margins, and disciplined leverage.

Growth Guidance: 

CFO Ramesh Jha projects 20–25% top-line growth for FY26, backed by a diversified, largely government-oriented order pipeline.

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Minimal Impact from US Tariffs:

Afcons Infrastructure Ltd’s operations remain largely insulated from US tariffs due to its focus on domestic and non-US international markets, with key projects in India (e.g., Rs. 1,007 crore Bhopal Metro) and Europe (e.g., Rs. 6,800 crore Croatia railway). 

As US tariffs primarily target goods like textiles and electronics, Afcons’ EPC services—centered on infrastructure like roads, railways, and ports—face negligible exposure, ensuring stable revenue streams for global investors.

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Risks to Consider:

Execution Delays: 

Government contract dependencies may cause timeline slippages.

Competitive Pressures: 

Rising EPC competition could impact margins.

Market Volatility: 

Infrastructure stocks face broader market risks.

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Editorial View:

At ₹423, Afcons Infrastructure is far from just another EPC stock—it’s a disciplined performer with a knack for turning opportunity into measurable growth. 

A 50% year-on-year jump in net profit, a swelling ₹36,800+ crore order book, and a string of high-value contract wins—both in India and overseas—underline its ability to deliver consistently. 

Backed by bullish brokerages and guided by 20–25% projected top-line growth for FY26, Afcons isn’t merely keeping pace with India’s infrastructure boom—it’s helping set the pace. This is a stock built for patient investors who value steady compounding anchored in real execution, not hype.

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Meanwhile, yesterday's call: SW Solar Ltd (Rs.279) did well even today. It made an intraday high of Rs.280.40. The swing traders can hold the scrip with a SL at Rs.476.70.