G R Infraprojects execution accelerates as diversified order book supports FY27 growth

Investment View and Valuation

Motilal Oswal Financial Services retains its Buy rating on G R Infraprojects with a sum-of-the-parts target price of Rs 1,100. The positive view is supported by strong Q1 FY27 execution, a sizeable order book, an expanding presence beyond roads and a strong balance sheet.

Motilal Oswal expects G R Infraprojects to deliver revenue and EBITDA compound annual growth rates of 17 per cent and 28 per cent, respectively, over FY26 to FY28. The target price values FY28E core PAT at 5 times P/E for Rs 573 per share and the asset portfolio at Rs 527 per share.

Q1 FY27 Financial Performance

G R Infraprojects reported standalone revenue of Rs 24,234 million in Q1 FY27, up about 33 per cent year on year and 14 per cent above Motilal Oswal's estimate of Rs 21,241 million. EBITDA increased 16 per cent year on year to Rs 2,671 million, also 14 per cent above the broker's estimate.

The EBITDA margin was 11 per cent, down 170 basis points year on year but in line with the estimate. Adjusted PAT declined about 6 per cent year on year to about Rs 2,036 million, broadly in line with expectations, owing to lower other income. The results reflected strong execution but no near-term margin expansion.

Order Book and Growth Outlook

The order book stood at about Rs 2,53,000 million as of June 2026, excluding L1 orders. Roads remained the largest component, while power transmission, MMLP and other segments contributed to the company's diversification.

Management expects FY27 order inflows of about Rs 1,40,000 million to Rs 1,50,000 million in roads, Rs 20,000 million to Rs 30,000 million in tunnels and about Rs 50,000 million in power transmission. Aggregate FY27 order-inflow guidance is Rs 2,00,000 million to Rs 2,50,000 million, subject to bid-pipeline conversion.

Management expects FY27 revenue growth of 15 per cent to 20 per cent, supported by Rs 10,000 million to Rs 12,000 million of oil and gas execution, timely project ramp-up and fresh orders. Motilal Oswal notes that substantial execution of fresh orders may become meaningful only in FY28.

Diversification and Structural Growth Drivers

The company is diversifying into oil and gas, railways, metros, power transmission, hydro, tunnelling and telecom while retaining roads as its core focus. Motilal Oswal believes that a robust tender pipeline, improving project awards supported by the government's infrastructure push, a more favourable bidding environment and tighter NHAI qualification criteria can support growth.

Profitability and Execution Risks

• Selective intense competitive bidding and sharp increases in raw-material costs could affect profitability.
• About 40 per cent of raw-material costs are linked to crude prices, so elevated crude prices and geopolitical tensions could pressure margins.
• Higher project wins and better execution scale could support margin expansion.
• Working-capital days rose to 148 from 109 in June 2025, mainly because of higher debtor days. Consolidated trade receivables were Rs 10,900 million and unbilled revenue was Rs 5,000 million.

Management guided for FY27 capital expenditure of Rs 3,000 million to Rs 3,500 million and plans Rs 6,000 million to Rs 7,000 million of warehousing and logistics equity investment over three years. This could affect near-term return on equity because of front-ended investment and long project gestation.

Balance Sheet and Investment Commitments

G R Infraprojects had standalone debt of Rs 3,600 million and consolidated debt of Rs 54,100 million as of June 2026. Standalone debt-to-equity was 0.04 times and consolidated net debt-to-equity was 0.45 times. Investments in subsidiaries were Rs 24,500 million, while the balance equity commitment for HAM and BOT projects was Rs 33,500 million, including about Rs 10,000 million expected in FY27.

Earnings Estimate Changes