PSP Projects Q1 FY27 Earnings Call: Revenue Surges 65%, Order Book Crosses ₹13,245 Crore

What Happened ?

Management stated that despite seasonal labour shortages and the onset of the monsoon, the company delivered robust execution across its major projects. Most key projects have now moved beyond excavation into the core construction phase, improving execution efficiency.

The company also strengthened its leadership and project management teams to support a significantly larger project portfolio while maintaining quality and timely execution. 

key details

Strong Financial Performance:

• Revenue increased 65% YoY to ₹853 crore.
• EBITDA more than doubled to ₹55 crore.
• EBITDA margin improved to 6.42%.
• PAT increased nearly 50 times YoY.
• Employee costs rose due to annual increments and higher workforce expansion.

Note:

• Management expects employee cost as a percentage of revenue to normalize as execution improves during the year. 

Record Order Book Supports Growth:

• Outstanding order book reached ₹13,245 crore.
• Around 70% comprises group projects.
• External projects account for 30%.
• Bid pipeline exceeds ₹6,200 crore.
• Q1 order inflows totaled ₹630 crore, with 93% from the Adani Group.

Note:

• Management believes the current order book provides strong visibility for revenue growth over the next several years.

Project Execution Update:

• Workforce deployed exceeded 16,000 labourers across projects.
• SMC High-Rise project has entered MEP, façade and interior execution.
• Ahmedabad Airport city-side development continues at full pace.
• RVNL projects nearing completion.
• Ambaji Temple project has progressed into foundation works.

Note:

• Labour availability is expected to improve over the coming quarters, supporting faster execution. 

Management Outlook:

Management reiterated:

• FY27 revenue guidance of ₹4,400–4,500 crore.
• Revenue growth expected to remain above 25%.
• EBITDA margin expected to improve to 7–8% during the second half.
• Annual capex expected at 3–4% of revenue.
• Working capital and finance costs are expected to improve further.

Note:

• Management indicated that lower employee cost as a percentage of revenue and higher execution should support margin expansion from H2 FY27. 

Adani Projects Continue to Drive Growth:

• Around 45% of Q1 revenue came from Adani Group projects.
• Approximately ₹3,000 crore of the order book relates to Dharavi redevelopment.
• Current Dharavi contracts involve construction of around 30,000–32,000 homes.
• Management expects additional opportunities as project execution progresses.
• Cost-plus contracts reduce exposure to raw material price volatility.

Note:

• The company continues prioritizing Gujarat and Mumbai while strengthening execution capabilities for future Adani projects. 

Balance Sheet & Liquidity:

• Long-term borrowings stood at ₹38 crore.
• Short-term borrowings were ₹217 crore.
• Mobilization advances totaled ₹836 crore.
• Fixed deposits stood at ₹324 crore.
• Available credit facilities remained at ₹653 crore.

Note:

• Management expects lower finance costs and believes the company could move toward a net debt-free position over the coming quarters. 

Risk Analysis

Summary:

• PSP Projects continues to benefit from a strong order pipeline and improving execution. However, future performance depends on labour availability, timely project execution, customer collections and sustained infrastructure investments.

Key Risks:

• Labour shortages during peak construction periods.
• Delays in execution of large projects.
• Collection risk from government receivables.
• Raw material price volatility on fixed-price contracts.
• Dependence on large group projects.
• Delays in new project awards.

Worst Case:

• If labour shortages persist, project execution slows or collections are delayed, revenue growth and margin improvement could fall below management expectations despite a strong order book.

Risk Level: Medium

Company Statement

• Order book reached a record ₹13,245 crore.
• Revenue guidance of ₹4,400–4,500 crore remains unchanged.
• EBITDA margins are expected to improve in the second half.
• Strong execution momentum is visible across key projects.
• The company continues investing in organizational capacity and project management.
• Focus remains on disciplined execution, operational excellence and sustainable growth.