Afcons Infrastructure shares trade higher; Nuvama suggests ‘buy’, sees 22% more upside

Afcons Infrastructure share price traded higher on Friday and the stock has more upside potential of over 22% in the next twelve months, analysts said. Afcons Infrastructure shares gained as much as 1.8% to ₹445.80 apiece on the BSE.

Afcons Infrastructure is the flagship infrastructure engineering and construction company of the Shapoorji Pallonji Group. It has delivered a consistent performance over the past decade on various operational parameters. Among listed EPC companies of a certain scale, Afcons Infrastructure has the highest revenue, EBITDA and PAT CAGR over FY09–24.

Brokerage firm Nuvama Institutional Equities initiated coverage on Afcons Infrastructure shares with a ‘Buy’ rating, and a target price of ₹535 apiece, based on 25x Q4FY27E EPS. The target price implies an upside potential of 22.2% from Thursday’s closing price.

“Afcons Infrastructure (AIL) has forged a legacy of executing large and technically complex infra EPC projects over the past six decades. Operationally, it has built out diversified geographical and segmental exposure. Financially, efficient working capital management has allowed it to fund growth via internal accruals,” Nuvama Equities said in a report.

The company’s order intake and order book increased at a CAGR of 17% – 18% each over FY06 – 9MFY25. Similarly, over FY06 – FY24, the company clocked a revenue CAGR of ~18% and a PAT CAGR of ~29%.

“The ability to deliver consistent growth while simultaneously reducing its leverage sets AIL apart from its peers in our view,” Nuvama said.

Moreover, Afcons Infrastructure has optimally diversified its operations by segment and geography. It also operates overseas — historically making up 25–30% of its business.

“Robust order intake in FY25 implies Afcons Infrastructure’s revenue visibility (~3.8x, including L1 orders) is much higher than its average book-to-bill over the past two decades. Its margin trajectory is improving, driven by increasing size or complexity of projects. Our investment thesis is reinforced by its efficient working capital cycle, which is keeping leverage in check (net debt/ equity at ~0.3x). In short, we argue AIL is set to continue its success story,” Nuvama said.

Afcons Infrastructure Stock Price Trend

Afcons Infrastructure shares made a debut in the Indian stock market on November 4, 2024. The stock was listed at ₹426.00 apiece on the NSE, a discount of 8% to the issue price of ₹463.00 per share. On BSE, Afcons Infrastructure shares were listed with 7.12% discount at ₹430.05 apiece.

Afcons Infrastructure shares are trading lower than its issue price. The stock hit a high of ₹570 apiece on January 3, 2025, while it hit a low of ₹398.55 apiece on March 3, 2025.

Over the past one month, Afcons Infrastructure shares declined nearly 6%, while the stock has dropped over 18% on a year-to-date (YTD) basis.

At 1:00 PM, Afcons Infrastructure shares were trading 0.56% higher at ₹440.20 apiece on the BSE. 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.