Ahluwalia Contracts (India) Ltd

Ahluwalia Contracts (India) Limited reported 1QFY27 results with a 12.03% growth in turnover to INR1,125.81 crores but a 77.65% decline in PAT to INR11.42 crores compared to 1QFY26. The EBITDA margin fell to 4.29% from 8.59%, primarily due to a INR29 crores reduction in the AIIMS Jammu project bill, increased labor costs in NCR (35-40% rise in minimum wages), and higher IDC costs from West Bengal and Assam SIR drives and elections. The net order book stood at INR20,663.52 crores as of 30 June 2026, with INR512.81 crores in order inflow for FY27. Management noted that labor cost increases are permanent and not expected to reverse, with potential compensation from clients over the next two quarters. Projects like Central Vista and Gems and Jewellery Park are expected to contribute INR700 crores and INR100 crores respectively in FY27, with higher billing in subsequent years. However, uncertainties like NGT regulations and ongoing labor shortages could impact margins. The company expects top-line growth of 12-15% for FY27 but ruled out double-digit EBITDA margins for the year due to external factors. The CFO mentioned a 1.5% impact on EBITDA from labor costs, with potential for partial offset through client incentives and productivity gains. The company emphasized that labor shortages and rising costs are industry-wide challenges, not unique to Ahluwalia.

The document highlights significant declines in profitability metrics, permanent labor cost increases, and external challenges like NGT regulations, which collectively indicate a negative tone.