Ashoka Buildcon Eyes Stronger H2, Significant Debt Reduction

Ashwin Thakker

— 2 min read

Here are the key highlights from Ashoka Buildcon's forward-looking guidance:

  • Expected FY'26 Revenue Growth: 10-12%, driven by a strong H2 turnaround.
  • Projected EBITDA Margin: Approximately 9.5-10% for new EPC projects.
  • FY'26 Order Inflow Target: INR10,000-12,000 crores, focusing on Roads, Railways, Power.
  • Significant Debt Reduction: Aim to reduce total debt from INR6,800 crores to around INR1,000 crores post-monetization.
  • Asset Monetization: Closure of 5 BOT and 5 HAM projects by September 30, 2025, to yield approximately INR1,200 crores net cash.
  • FY'26 Capex Guidance: Approximately INR125 crores.

Ashoka Buildcon Limited, a key player in India's infrastructure sector, recently held its Q1 FY'26 earnings call, outlining a strategic path forward despite a muted start to the fiscal year. The company's management detailed plans for a robust second half, significant asset monetization, and substantial debt reduction, setting a clear trajectory for sustainable growth.

Building Momentum: Revenue Recovery and Strategic Order Inflows

Ashoka Buildcon experienced a slower Q1 FY'26, with standalone revenue declining 30%, primarily attributed to early monsoon effects and several new projects remaining in the mobilization phase. However, the company is confident in a strong rebound.

"We're expecting around 10% growth. And this Q1, Q2 will be a little negative. So we'll have to catch up in Q3, Q4. Overall, we'll be around 10% to 12% up," stated Mr. Satish Parakh, Managing Director.

The company anticipates executing INR4,500-INR5,000 crores in Q3 and Q4 from its existing INR15,886 crores order book. For FY'26, the target for new order inflows stands at INR10,000-INR12,000 crores, with a robust pipeline visible across NHAI, MoRTH, and various state government projects.

Strengthening Financials: Debt Reduction and Margin Stability

A cornerstone of Ashoka Buildcon's financial strategy is asset monetization. The company expects to close the sale of five BOT and five HAM projects by September 30, 2025, yielding approximately INR1,200 crores in net cash after exiting an existing investor.

"We'll be basically addressing the INR1,650 crores of stand-alone debt, which will be brought to the typical levels of around, say, INR500 crores to INR600 crores max," informed Mr. Paresh Mehta, CFO.

This move is projected to reduce total debt from INR6,800 crores to around INR1,000 crores within a year, enhancing financial flexibility. Regarding profitability, the company anticipates maintaining its EBITDA margins for new projects at 9.5-10% in the coming quarters, reflecting improved margins from newer projects compared to older ones.

Ashoka Buildcon's Q1 FY'26 earnings call painted a picture of strategic resilience and ambitious forward-looking plans. Despite initial headwinds, the company is poised for a strong recovery in the latter half of the fiscal year, driven by a robust project pipeline and significant financial restructuring through asset monetization. This clear guidance underscores a commitment to sustainable growth and a stronger balance sheet in the coming periods.

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