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Execution muted; Guidance revised; Margin recovery H2

ASBL reported a soft Q1FY27, with standalone revenue at INR 12.9bn (-2% YoY) and consolidated revenue at INR 15.0bn (-21% YoY), the latter reflecting the BOT/HAM assets monetised in FY26. Standalone EBITDA fell 24% YoY to INR 929mn with margin at 7.2% vs 9.3% YoY (reported EBITDA including other income at INR 1.26 bn, -17% YoY, margin 9.5%), weighed by front-loaded mobilisation and establishment costs on newly commenced projects; PAT was largely flat at INR 315mn on lower finance cost. Management has cut FY27 revenue growth guidance to 10-15% (from 20%) and EBITDA margin to 9-9.5% (from ~10%, on a reported basis), with recovery deferred to H2 as new projects ramp. Order book stands at INR 152.5bn (~2.6x TTM standalone revenue), diversified with ~63% roads/railways and ~33% power T&D, and inflow guidance of INR 60-80 bn over the balance three quarters against INR 7.8bn booked and INR 18bn at L1. Monetisation of the six remaining SPVs has slipped a quarter to Sep/Oct-26 for four assets and Q3/Q4FY27 for the balance two, with realisation of INR 11.5bn intact and Chennai ORR and Jaora to follow. Margin delivery and the pace of receivable release in power T&D remain the key monitorables. Following the guidance revision, we slightly trim down FY27E/FY28E EPS estimates by ~1%/2% and lower TP to INR 150 (earlier INR 150). We retain BUY, as the stock continues to trade below book value, offering valuation support despite near-term execution challenges.

Muted execution in Q1FY27:

ASBL reported standalone revenue of INR 12.9bn, down 2% YoY, as execution stayed subdued on a weak domestic road awarding cycle and slower ramp at newly commenced projects. EBITDA fell 24% YoY to INR 19.3bn with margin down 210bps YoY at 7.2%, hit by administrative, employee and mobilization costs loaded upfront for new verticals and projects, which should rationalize over coming quarters. Finance cost declined to INR 602 mn from INR 841mn YoY on deleveraging, holding PBT flat at INR 430mn and lifting PAT 3% YoY to INR 315mn. Consolidated revenue fell 21% YoY to INR 15bn and EBITDA 55% YoY to INR 2.92 bn, entirely reflecting BOT/HAM assets monetized in FY26 moving off the books; consolidated PAT stood at INR 1.27bn. JaoraNayagaon toll grew 7.5% YoY to INR 749mn

Guidance revised lower:

FY27 revenue growth guidance has been cut to 10-15% from 20%, on flat Q1 and supplychain uncertainty, with H1 subdued and a meaningful ramp only from H2. EBITDA margin guidance is lowered ~50 bps to 9-9.5% as the Q1 shortfall is not fully recoverable, with FY28 aspiration of 10.5-11% as better-priced projects contribute. Order inflow is guided at INR 60-80 bn over the balance three quarters, against INR 7.8 bn secured in Q1 and INR 18 bn at L1 converting in Q2, supported by a bid pipeline of ~INR 1.75 tn (NHAI/MoRTH ~INR 1 tn, states ~INR 250 bn, railways ~INR 500 bn), with INR ~80 bn already bid and awaiting opening. Capex is modest at INR 1.25 bn for FY27, while interest cost is guided at INR 2.25-2.4 bn in FY27 and below INR 2 bn in FY28.

Monetization deferred, value unchanged:

Sale of the remaining six ACL SPVs has slipped a quarter - four assets now by September/early October 2026 (vs June earlier) on handover compliances, and the balance two by Q3/Q4FY27. Aggregate realization is intact at INR 11.5bn, of which INR ~7bn accrues from the first four; a residual holdback of INR 300-400mn is possible. On the five HAM and five BOT assets monetized in FY26, only ~30% of the residual receivable has been collected. Beyond this, Chennai ORR (100%, carrying cost INR ~3bn) is targeted by December 2026 with investors in diligence, and Jaora-Nayagaon (74%, equity invested INR 2.78bn) by March 2027/H1FY28, with consideration frozen on neither. Standalone debt stands at INR ~12bn, of which INR ~7 bn is third-party and should fall to INR 5-6bn post monetization. Working capital rose INR ~2.5bn QoQ on advances for new projects, while power T&D receivables in unbilled revenue are expected to be released by December 2026

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