The global brokerage Jefferies has given a ‘Buy’ rating to Afcons Infrastructure. The brokerage house has set a target price of Rs 580 per share. This implies an upside of about 27% from current levels. According to the brokerage report, the bullish call stems from strong order flow visibility, financial discipline and its global diversification strategy.
Let’s take a look at the 3 key factors on why the brokerage is bullish and the rationale behind it –
Jefferies on Afcons: Order pipeline offers big growth visibility
One of the key reasons driving Jefferies bullish stance is the Afcons pipeline of projects. The brokerage report noted that Afcons reported “105% YoY order flow growth in FY25,” reflecting the company’s strong positioning in the infrastructure space.
While FY26 started on a weaker note with a 63% YoY decline in Q1 order inflows at Rs 1,100 crore, the outlook remains promising.
The brokerage house highlighted that Afcons was recently declared the lowest bidder (L1) on three projects in Croatia worth Rs 113 billion, which are likely to be converted within the next few months.
The report further added that there is still uncertainty around another Rs 100 billion worth of L1 projects in Maharashtra. However, this could act as an upside trigger to the company’s Rs 200 bn FY26E order flow guidance.
Jefferies on Afcons: Financial discipline remains intact
Jefferies also pointed in its report that company’s conservative approach when it comes to bidding for projects is another key factor supporting their bullish call. Unlike some players which focus on scale at the cost of profitability, “Afcons opted for technically complex, high-value contracts where competition is limited and margins are stronger,” the brokerage house pointed out.
The brokerage stated, “Afcons’ track record reflects return, margin and cash flow focus vs an aggressive bidding approach.” This means the company prioritises sustainable growth over market share grabs.
Another key factor, as per Jefferies is that the “balance sheet leverage is very comfortable with net debt:equity at 0.5x, which we expect should further improve going ahead as execution picks up.”
Jefferies on Afcons: A smaller but comparable peer to L&T
Furthermore, the brokerage house highlighted that the Afcons business model is often compared with Larsen & Toubro (L&T), “Like L&T, Afcons is well-diversified across segments and has material overseas presence across regions like Africa, Europe, Middle East and SE Asia.”
Interestingly, Afcons trades at a discount compared to L&T, making it an attractive bet for investors looking for infrastructure exposure. The brokerage explained, “Our PT of Rs 580 values Afcons at 25x PE Sept 27E. This is a 7% discount to our implied target multiple of approx. 27x on L&T’s E&C business.”
Another point highlighted by Jefferies is that unlike L&T, Afcons has no exposure to the defence segment. The report noted, “Afcons has no presence in defence which reduces its investor ESG concerns vs L&T.”