Diversified players better placed in infra sector

In the first quarter of 2025-26 (Q1FY26), results across engineering procurement and construction (EPC) companies, and road and infrastructure segments may be mixed.

- DEVANGSHU DATTA

Diversified companies like L&T, KPIL, KEC International, and Ahluwalia Contracts may report double-digit revenue growth. But road firms like KNR Constructions, GR Infra, and Ashoka Buildcon face headwinds due to lower order books, and could see revenue declines. Asset monetisation continues for road players.

Order inflows have been robust for diversified companies but weak for road developers in Q1FY26. However, book-to-bill ratios remain adequate in the range of 2-4 times even for most road players (although FY25 has a low base in Q1FY25).

Operating profit margins are likely stable or may improve for diversified companies, but road companies will see margin pressures. Operating profit margins for KEC International may expand due to improved performance in the power vertical. Debt and working capital are likely to rise on a sequential basis in most cases due to seasonality.