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The brokerage has ascribed a price target of ₹561 on the stock, which implies a potential upside of 30% from the current levels.
Nomura wrote in its note that Afcons Infrastructure is proficient in executing complex projects.
The brokerage expects revenue and profit CAGRs of 22% and 39%, respectively, over FY25F-27F.Considering a total order pipeline worth ₹3.5 lakh crore over the next two years, Nomura expects the company to secure orders worth ₹55,000 crore over FY25F-27F.
The brokerage forecasts a profit CAGR of 39% over FY25F-27F.
Investec has a ‘Buy’ rating on Afcons Infra, with a price target of Rs 630 per share.
Investec said that Afcons Infra’s earnings beat estimates and was driven by impressive margins and strong order inflows.
EBITDA margins stood at 11.3%, marking the third consecutive quarter of margins exceeding 11%.
Despite a revenue miss, EBITDA/EBIT came in 4-8% higher than expectations, the brokerage noted.Afcons Infra’s order backlog has grown from the ₹29,000-31,000 crore range seen over the past four years (FY19-24) to ₹38,000 crore (about 3x revenues), excluding L1 orders worth ₹10,600 crore.
Jefferies, which has a ‘Buy’ rating and a price target of ₹580 on Afcons Infra, calls it comparable to L&T.
The third quarter EBITDA exceeded estimates by 15% as margins surprised by 68 basis points, reaching 11.3%. Revenues rose 3% year-on-year.
Margins dipped 63 basis points year-on-year in Q3 but are up 90 basis points in nine months.
The management’s FY25E guidance is ₹30,000 crore in order flow, representing more than a 3x year-on-year rise, including spillover orders from FY24 amid national elections.
The brokerage said that a 9% FY24-27E revenue CAGR and a 17% FY25E-27E CAGR are backed by strong order flow growth.
Order flow surged 88% year-on-year in nine months to ₹14,600 crore.
Jefferies expects 20-25% revenue growth in FY26E, after which the company expects to sustain at least 15% double-digit growth, similar to past trends.
All four analysts who track Afcons Infra have a ‘Buy’ rating on the stock. The consensus recommendations of analysts implies a potential upside of nearly 41%.
Shares of Afcons Infra settled 1.97% lower on Friday at ₹430. The stock made a new post-listing high of ₹570.
