Ashoka Buildcon Eyes FY26 Growth, Debt Cuts, Asset Sales

Ashwin Thakker

— 2 min read
  • FY26 Revenue Guidance: Expecting 10-12% year-on-year growth, with a strong recovery and ramp-up in Q3 and Q4.
  • FY26 EBITDA Margin Guidance: Anticipated to be maintained around 9.5-10% on new projects.
  • Order Inflow Target (FY26): Aiming for INR10,000-INR12,000 crores, including roads, railways, power, and building segments.
  • Asset Monetization: Targeting closure of 5 BOT and 5 HAM projects by September 30, 2025, yielding approximately INR1,200 crores net cash after adjusting for Macquarie exit.
  • Debt Reduction Target: Standalone debt expected to reduce significantly from INR1,650 crores to INR500-INR600 crores post-monetization. Total project-level debt also to drop from INR6,800 crores to around INR1,000 crores within a year.
  • FY26 Capex: Projected around INR125 crores.
  • Future Growth: Targeting a higher growth rate for FY26-27, leveraging existing order book and new opportunities.

Ashoka Buildcon Limited's recent Q1 FY'26 earnings call revealed a clear roadmap for future growth, debt reduction, and strategic asset monetization. Despite a Q1 revenue degrowth, the management detailed plans to accelerate execution and capitalize on India's booming infrastructure sector. The focus is on robust order inflows, improved project margins, and significant debt reduction through planned divestments, painting a confident picture for the fiscal year.

FY26 Outlook: Growth Trajectory and Order Book

Ashoka Buildcon anticipates a strong rebound in the latter half of FY'26, projecting 10-12% revenue growth. While Q1 and Q2 saw a slower start, Managing Director Mr. Satish Parakh indicated a significant execution ramp-up in Q3 and Q4 is expected. The company targets new order inflows of INR10,000-INR12,000 crores for FY'26, focusing on roads, railways, and power transmission & distribution. This growth strategy aims to capitalize on India's infrastructure development and their robust order book.

Financial Discipline and Asset Monetization

Ashoka Buildcon emphasized a strategic asset monetization plan to strengthen its balance sheet. The company targets closing the sale of five BOT and five HAM projects by September 30, 2025. This first phase is expected to yield approximately INR1,200 crores net cash. CFO Mr. Paresh Mehta confirmed standalone debt is projected to fall from INR1,650 crores to INR500-INR600 crores. This significant deleveraging, alongside maintaining EBITDA margins of 9.5-10% on new projects, highlights the company's commitment to financial discipline and sustainable, profitable growth.

Ashoka Buildcon projects a strong second half for FY'26, fueled by accelerated project execution and strategic asset monetization. Their clear guidance on revenue growth, margin stability, and significant debt reduction positions the company for sustainable future growth. With a robust order pipeline and focus on high-margin projects, Ashoka Buildcon is poised to effectively leverage India's infrastructure development, delivering on its targets.

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