PSP Projects Ltd has reported a satisfactory performance for the third quarter of FY26, supported by strong revenue growth, though profitability continues to lag management’s long-term margin targets.
Revenue for the quarter rose nearly 24% year-on-year and 11% sequentially to ₹7.7bn. The company attributed the improvement to better labour availability, smoother access to work fronts and steady execution across its order book. PSP said its project pipeline remains robust, providing revenue visibility of around 3.5 times its trailing twelve-month turnover.
EBITDA margins improved to 6.7%, up 106 basis points from a year earlier, though they declined marginally compared with the previous quarter. Margin performance was affected by higher employee costs, including a one-time ₹80m provision linked to the implementation of the new labour code. Lower margins on newer projects, particularly during foundation and excavation stages, also weighed on profitability. Despite this, EBITDA increased by nearly 47% year-on-year.
Net profit for the quarter stood at approximately ₹161m, representing a sharp increase from the previous year. The rise was driven by improved operating performance, a limited increase in interest costs and a lower effective tax rate.
The company reiterated its revenue guidance of ₹31–32bn for FY26 and expects turnover to exceed ₹40bn in FY27. It also maintained its EBITDA margin guidance of 8–9%, supported by strong order inflows, including expected business from the Adani Group.
On the balance sheet, gross borrowings increased sequentially due to higher working capital requirements. Management said borrowings are expected to normalise as outstanding receivables are collected and mobilisation advances—largely interest-free—are received. Working capital levels remain comfortable.
PSP also highlighted a favourable arbitration award of ₹614m, which is expected to provide a financial uplift once realised.
Analysts have rolled forward valuations to FY28, retaining a 15-times earnings multiple. On this basis, the stock carries a target price of ₹818 per share, with the rating revised to “Accumulate”.
