L&T, Dilip Buildcon, NCC: What lies ahead for EPC companies?

This is despite the undemanding base effect of FY25, when revenue slumped 4%-5% year-on-year (YoY), with the absolute sector EBITDA remaining largely flat, hit by the busy election season.

EBITDA stands for earnings before interest, taxes, depreciation, and amortisation. It is also known as operating profit.

The EPC sector across 22 listed entities delivered revenue growth of 5% YoY in the first quarter of the current fiscal year (Q1 FY26), marking the fifth consecutive quarter of single-digit revenue growth, the report said further.

Meanwhile, RBI, in its latest bulletin, said capital investment by the private sector is likely to rise 21.5% to ₹2.67 lakh crore in 2025-26, aided by robust macroeconomic fundamentals and a 100 bps policy rate cut.

Despite global uncertainties, Indian firms entered the 2025-26 fiscal year with healthier balance sheets, higher cash buffers, improved profitability, and greater access to diversified funding sources, said the article 'Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26' published in the Reserve Bank of India's (RBI's) August bulletin.

The continued policy push for infrastructure, sustained disinflation, combined with lower interest rates, easy liquidity conditions, and rising capacity utilisation, is fostering an environment conducive to private investment, it said.

Moreover, India's GDP print for Q1 FY26 also bodes well. The Indian economy grew by 7.8% in April-June -- the highest in the past five quarters. India remains the fastest-growing major economy, as China's GDP growth in the April-June period was 5.2 per cent.

CII stands for Confederation of Indian Industry.

The Outlook

India Ratings said the hopes of a strong start to FY26 by the EPC sector have not materialised, despite an undemanding base of the past year, hit by the election impact. Guidance by the companies suggests aggregate revenue growth of 12.7% year-on-year, around 100 bps lower than the earlier guidance.

"This is susceptible to further downside as the companies' guidance heavily relies on the hopes of a second-half recovery and assumption of robust order flows from the Ministry of Road Transport and Highway/National Highway Authority of India, after the recent announcement of a project-wise pipeline worth Rs 3.5 trillion, to be awarded in FY26," Krishan Binani, Director, Corporate Ratings, Ind-Ra, said.

According to Ind-Ra estimates, EPC firms are expected to see mid-to-high single-digit revenue growth and largely stable margins, with some upsides during FY26.

"Margin recovery hopes have also receded, with aggregate guidance suggesting a 20 bps improvement at 10.8 per cent in FY26 versus the past quarter's assumption of 11 per cent. Central and state capex is likely to grow faster in FY26 with a lean election season, yet the overall sentiment for fresh investments remains muted, given the uncertain policy environment," Binani added.

L&T

Infrastructure major Larsen & Toubro (L&T) reported a 29.8% rise in consolidated net profit at ₹3,617.19 crore for the June quarter (Q1 FY26) on the back of higher revenue from operations.

The company had posted a consolidated net profit of ₹2,785.72 crore in the year-ago period, L&T said in a filing to the BSE.

The consolidated revenue from operations in the April-June period increased to ₹63,678.92 crore over ₹55,119.82 crore logged in the year-ago period, the filing said.

The company achieved "consolidated revenues of ₹63,679 crore for the quarter ended June 30, 2025, registering a YoY (year-on-year) growth of 16% with healthy execution witnessed in its key projects and manufacturing portfolio".

"This quarter we have performed well across all financial parameters. At a group level, we registered once again the highest order inflow for Q1 ever," the company's Chairman and Managing Director S N Subrahmanyan said.

The consolidated order book of the group as of June 30 was at ₹612,761 crore.

Dilip Buildcon

Dilip Buildcon reported a 93.6% year-on-year (YoY) jump in consolidated net profit to ₹271 crore for Q1 FY26, supported by improved margins and an exceptional gain of ₹169.3 crore.

The EBITDA grew 8.7% to ₹520 crore, while the EBITDA margin rose sharply to 19.8% from 15.2% last year.

However, revenue declined 16.4% year-on-year to ₹2,620 crore, reflecting the broader slowdown in EPC (engineering, procurement, and construction) ordering activity, said a report by CNBC-TV18.

Dilip Buildcon’s order book stood at ₹13,695 crore as of June 30, 2025. Roads and highways made up 17.8% of the order book, while mining contributed the largest share at 28.9%. Irrigation, tunnels, water supply, optical fibre, urban development, bridges, and metro projects accounted for the rest.

MD & CEO Devendra Jain noted that while headwinds in the EPC segment persist, the company’s coal mining and road projects under the Hybrid Annuity Model (HAM) helped offset the softness.

Sterling and Wilson Renewable Energy

The company, as per reports, reported a whopping 680% growth in its Q1 FY26 consolidated net profit at ₹39 crore as against ₹5 crore reported in the year-ago period. The company's revenue from operations surged 93% to ₹1,762 crore. It was ₹915 crore in the year-ago period.

The profit after tax (PAT) was down 29% on a sequential basis versus ₹55 crore reported by the company in Q4 FY25. The topline also fell 30% compared to the ₹2,519 crore posted in the January-March quarter of FY25.

IRCON International

The company’s consolidated revenue from operations for Q1 FY26 fell to ₹1,786.3 crore, down sharply from ₹2,287.1 crore logged in the same quarter last year and ₹3,412.1 crore seen in the previous quarter. Total income also declined to ₹1,892.4 crore from ₹2,385.3 crore in the year-ago period and ₹3,515.3 crore in the previous quarter, according to a report by Business Standard.

On the operational front, its EBITDA came in at ₹323.9 crore, lower than the ₹357.4 crore seen a year ago and the ₹357.5 crore logged in the March quarter. Profit after tax dropped 26.7% to ₹164.1 crore from ₹224 crore seen in Q1 FY25. The EBITDA margin remained steady at 17.1%, but the fall in absolute numbers suggests pressure on volumes and execution pace.

The company said it had a robust order book of ₹20,973 crore, led by railway projects worth ₹15,724 crore and highway projects at ₹4,234 crore, the report added.

NCC Ltd

State-owned NBCC (India) Ltd has reported a 26% increase in its consolidated net profit to ₹135.03 crore for the first quarter of the current fiscal year on higher income.

Its net profit stood at ₹107.19 crore in the year-ago period.

The total income grew to ₹2,465.48 crore during the April-June period of the 2025-26 fiscal year from ₹2,196.20 crore in the corresponding period of the preceding year, according to a recent regulatory filing.

NBCC Ltd is into project management consultancy (PMC) and real estate businesses.

During 2024-25, NBCC Ltd posted a net profit of ₹557.42 crore and a total income of ₹12,272.99 crore.