Ahluwalia Contracts reports a 12.03% rise in revenue for Q1, but faces margin erosion due to soaring labour expenses and cautious bidding amid volatile material costs. The company’s large order pipeline offers revenue visibility, yet profitability margins are under strain as it adjusts to increased wages and supply-chain disruptions.
Ahluwalia Contracts (India) reported a 12.03% rise in turnover to Rs 1,125.81 crore in the quarter ended June 30, even as profitability came under pressure from sharply higher labour expenses. The company said its net order book stood at Rs 20,663.52 crore, giving it visibility for roughly the next three and a half years and supporting management’s forecast for 12% to 15% top-line growth in the current financial year.
The weak point in the quarter was the margin line. Deputy Managing Director Shobhit Uppal said EBITDA margin fell to 4.29% from 8.59% a year earlier, hurt by a Rs 29 crore reduction in the final bill for the AIMS Jammu project, disruption in West Bengal and Assam linked to elections and the special intensive revision drive, and a steep rise in wages in the National Capital Region. He said minimum pay in Haryana and Uttar Pradesh had increased by about 35% to 40%, hitting a region that accounts for around half of the order book.
Uppal said the labour shock is likely to leave a lasting mark on the company’s cost base, but not necessarily on future pricing. According to the company’s earnings call, Ahluwalia is now building higher staff, safety and labour assumptions into new bids and is seeking relief from clients on existing contracts where possible. Some agreements already include escalation clauses, while others do not, but management expects at least partial compensation to begin flowing in over the next two quarters.
The order pipeline remains large, but management is sounding more cautious on fresh awards. Total inflows in the quarter came to Rs 512.81 crore, and the company said it is no longer treating its earlier Rs 8,000 crore annual inflow ambition as a firm target because of volatility in materials and wages. It is also being selective in bidding, after refusing to extend validity for the Odisha Government University project. The RML Hospital project in Delhi is still in the lowest bidder stage but has not yet become a work order.
Large jobs already on the books are expected to do most of the heavy lifting as execution accelerates. Uppal said the Central Vista project alone could generate Rs 700 crore of billing in FY27 and Rs 1,000 crore in FY28, with completion targeted for FY29. He also pointed to rising billing from Dalia and DLF Downtown. Even so, he ruled out double-digit EBITDA margins this year, saying the business first has to absorb the full impact of labour inflation and supply-chain delays before margin recovery can take hold.
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