Established position in EPC, BOT and HAM Road Segments

ABL has an established track record of four decades in executing EPC contracts for roads, power, railways and building projects as well as development of roads and highways under BOT and HAM models along with its subsidiary, Ashoka Concessions Limited. The company has established relationships with state government departments, NHAI and the Ministry of Road Transport and Highways which continue to support the operations of the business. The company will be expanding its execution into renewable energy though it is under nascent stage. Acuite believes that ABL’s established position in the EPC segment along with BOT and HAM project execution capabilities will continue to support its business risk profile over near to medium term.

Monetization of assets resulted in making ACL, 100% subsidiary
ABL has completed monetisation of five hybrid annuity model (HAM) assets for a total consideration of Rs.1,146 crore to Epic Concesiones 2 Private Limited, Infrastructure Yield Plus II, Infrastructure Yield Plus IIA and India Infrastructure Yield Plus II. In addition, the company has sold five build-operate-transfer (BOT) projects to Maple Infrastructure Trust for Rs.1,847 crore.
The proceeds received till Q3 FY26 were utilised to provide a full exit to SBI Macquarie, resulting in ACL becoming a wholly owned subsidiary at a consideration of Rs.1,549 crore. Funds were also used towards reducing working capital borrowings and payment of Rs.166.60 crore was made towards buying stake in Jaora - Nayagaon Toll Road Company Private Limited (JNTRL) making it wholly owned subsidiary of ABL. Acuite believes that the pending monetisation of the remaining six HAM projects are expected to conclude by Q1 FY27 for an aggregate amount of Rs. 1,100 crore which will further strengthen the capital structure and improve its working capital cycle. The completion of these transactions will remain key monitorable.

Strong Order book position
The unexecuted order book stood at Rs. 15,927 crore as on December 31, 2025 (up from Rs. 14,888 crore as on September 30, 2025). Subsequently, the company secured additional orders worth Rs.308 crore. Further, on February 6, 2026, the company received a Letter of Acceptance (LOA) from Bihar Rajya Pul Nirman Nigam Limited in partnership with Aakshya Infra Project Private Limited (49% share), with the company’s share valued at Rs.241.93 crore. The order book/order inflow (OB/OI) stands at 2.33 times, providing revenue visibility over the medium term. ABL has also established a subsidiary in Saudi Arabia to expand its presence in the Middle Eastern infrastructure market and received an order of hotel project worth Rs. 846.38 Cr. on February 6, 2026. Acuite believes that the company’s established execution capabilities across diverse sectors and geographies will support scaling up operations over the medium term.

Moderation in Financial Risk profile

The tangible net worth of the company stood at Rs.4,008.95 Cr. in FY25 as against Rs.3,812.12 Cr. in FY24 due to accretion of reserves. The gearing level remains below unity and stood at 0.51 times as of March 31, 2025, as against 0.38 times as on March 31, 2024. The Total Outside Liabilities to Tangible Net Worth (TOL/TNW) ratio increased to 1.32 times as of March 31, 2025, compared to 1.27 times as on March 31, 2024, due to increase in debt. Further, the company's debt protection metrics have declined, with an Interest Coverage Ratio (ICR) of 2.27 times and a Debt Service Coverage Ratio (DSCR) of 1.62 times for FY25. The rise in debt has contributed to an increase in interest costs, along with lower accruals, has led to moderation in both ICR and DSCR. Acuite believes that the financial risk profile will improve over the medium term backed by utilization of monetization proceeds.

Decrease in scale of operations during 9MFY26 & Q3FY26

The company reported a 21% decline in revenue, which stood at Rs. 4,039.78 Cr. in 9MFY26 compared to Rs. 5,086.60 Cr. in 9MFY25, with full-year FY26 revenues expected to remain muted. The decline was primarily driven by a lower inflow of road orders from NHAI, delays in project milestones due to an extended monsoon and land acquisition challenges. Additionally, several projects are currently either in the initial stage or the completion/handover phase which contributed to lower revenue recognition. EBITDA margin improved to 9.26% in 9MFY26 as against 7.94% in 9MFY25 supported by cost discipline especially in raw material costs. PAT margin increased to 6.72% in 9MFY26 as against 2.71% in 9MFY25 supported by exceptional gains of Rs. 112.05 Cr. from HAM monetization and other one-time items.

Sequentially, the EBITDA margin declined by 10% and stood at 8.79% in Q3FY26 as against 9.74% in Q2FY26 due to an ECL provision of Rs. 20 Cr. related to delays in payments within the power business. PBT (before exceptional items) remained subdued by 24% and stood at 6.99% in Q3FY26 compared to 13.37% in Q3FY25, owing to increased finance costs driven by the company’s increased reliance on bank guarantee limits for infrastructure-sector operations. Acuite believes the scale of operations will increase by FY27 based on upcoming orders which will remain a key monitorable factor.

Intensive working capital cycle

The working capital cycle of ABL remains intensive on account of the inherent nature of the EPC business and long project execution cycle of 2-3 years. There is high dependence on state and central government authorities for receipt of payments. The intensive working capital cycle marked by Gross Current Assets (GCA) of 321 days for FY2025 as compared to 269 days for FY2024. This was mainly due to unbilled revenue and receivables classified as contract assets. For transmission and distribution(T&D) projects, 20% payment is received post operationalizing of projects and 10% is withheld as retention money until the expiry of defect liability period (usually 12 months), leading to long cycle for projects.
The inventory days of the company stood at 147 days in FY2025 as compared to 109 days in FY2024. The increase in inventory days is majorly due to increase in contract assets. The debtor days stood at 91 days in FY25 against 69 days in FY24. This is primarily due to delays in receiving payments from government entities. As a result, the debtor days remains elevated at the year-end.
The creditor days stood at 149 days in FY25 against 160 days in FY24. The company has established favourable payment terms with suppliers, allowing for longer payment periods without penalties. Acuite believes that the working capital cycle will likely remain intensive due to inherent nature of the business.