Synopsis: A construction company fell after a Gabon road project was terminated by the client despite 93 percent completion, triggering legal action. Management said the dispute is project-specific with no material business impact.
A small-cap stock in the business of infrastructure engineering and EPC construction slipped after news emerged that a key overseas road contract in Gabon was terminated by the client. The company stated that the project was largely completed and opened to traffic, and it is pursuing legal remedies. The company in context has an order book of about Rs 32,600 crore.
With a market cap of more than Rs 11,000 Cr, Afcons Infrastructure Ltd saw its stock hit an intraday low of Rs 294, which is 4 percent lower than the previous close of Rs 307.
What’s the News?
The company referred to its January 31, 2026 intimation regarding bond invocation by SOCIÉTÉ AUTOROUTIERE DU GABON or SAG for the EPC contract of National Road NR1 in Gabon, valued at approximately EUR 113 million. However, SAG has now issued a termination notice. About 93.5 percent of the 117 km project was completed and opened to traffic, with some portions pending land handover.
The company believes the termination is inconsistent with contractual terms and applicable law and is pursuing appropriate legal remedies. It clarified that the dispute is project-specific and does not affect its overall order book, operational capabilities, or business outlook, with no material adverse impact expected.
Afcons Infrastructure Limited reported an order book of about Rs 32,600 crore as of Q3FY26, reflecting strong visibility across metro, urban infra, marine and industrial projects. The company also secured fresh orders worth about Rs 1,300 crore in the first nine months of FY26, supporting steady execution pipeline and medium term revenue growth.
Urban underground and elevated metro projects form about 30 percent of Afcons’ backlog, followed by urban infra orders of bridges and elevated corridors at 22 percent and hydro projects at 25 percent. Marine and industrial contribute 16 percent, surface transport at 5 percent, and oil and gas about 2 percent, showing diversified sector exposure and risk.
Afcons Infrastructure Ltd is a leading Indian infrastructure engineering and construction company. It delivers large, complex EPC projects worldwide across bridges, highways, metros, tunnels, ports, water systems and oil & gas works. Founded in 1959, it’s the flagship infrastructure arm of the Shapoorji Pallonji Group with a global presence.
Afcons Infrastructure Limited has built over 5,100 lane km of roads, executed 235 marine works, and completed 195+ bridges and viaducts. Its portfolio includes 150+ km of metro projects, 65+ km of NATM tunnels, 47 industrial structures, 8 LNG tanks, 6 irrigation projects, and 60+ overseas assignments.
In the latest quarter, the company saw a YoY revenue decline of 7 percent, going from Rs 3,211 Cr in Q3FY25 to Rs 2,976 Cr in Q3FY26, while the QoQ slipped by less than 1 percent from Rs 2,988 Cr in Q2FY26. The YoY Net Profits decline stood at 35 percent, going from Rs 149 Cr in Q3FY25 to Rs 97 Cr in Q3FY26, while the QoQ decline came in at 8 percent from Rs 105 Cr in Q2FY26.
The company saw its margins grow by 40 bps YoY to stand at the current EBITDA margin of 13.3 percent. The company also has an ROCE of 20 percent and an ROE of 11 percent.
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