PSP Projects is an EPC and civil construction contractor executing institutional, industrial, and residential projects, heavily anchored to the Adani Group which constitutes roughly 70% of its INR13,245 crore order book as of June 2026. The business operates primarily in Gujarat and Mumbai, functioning as a specialized builder rather than a broad infrastructure player, leveraging an in-house precast facility with a capacity of 3 million square feet per year. Margins reveal the challenging economics of this niche, with blended EBITDA hovering at 6.42% in Q1FY27 and guided at just 7-8% for FY27. For a construction business, sustained EBITDA below 10% indicates a scale-driven, highly competitive game where the company acts more as a managed labor and execution contractor rather than holding specialized pricing power.
The economics of this business persist not through proprietary technology, but through deep integration with its primary client and favorable contract structures that insulate it from commodity volatility. Adani projects operate on a cost-plus percentage basis, ensuring 100% pass-through of material price escalations like aluminum and copper, which structurally protects the thin 6-7% EBITDA margins on those accounts. Furthermore, the company holds a first right of refusal for future phases of the Dharavi redevelopment, contingent on successfully delivering the current 30,000 to 32,000 houses valued at INR3,000 crores. The precast facility offers a mild operational moat by driving execution speed, such as completing 18 floors in 148 days, but the broader competitive structure remains a commodity execution game constrained by localized labor availability and regulatory approvals.
The inflection over the next 18-24 months centers on converting the massive order book into revenue while achieving operating leverage from recent capex of INR120-150 crores per year. By FY27, management targets consolidated revenue of INR4,500 crores, representing over 25% average growth, with an aim to scale towards INR9,000-10,000 crores by FY30. The bid pipeline currently stands at over INR6,200 crores, with expectations of INR5,000-6,000 crores in annual order inflows from the Adani Group. Over this horizon, the company expects to transition to a net debt-free status by eliminating an annual interest cost of INR41-45 crores, which should expand net profit margins to 3-4%. Labor deployment is slated to increase by 3,000-4,000 workers from a base of 16,000-17,000 as projects enter MEP and finishing phases, which is critical to realizing the targeted revenue acceleration.
Management's walk-talk reveals a clear pattern of over-promising on timelines and margins, necessitating a downgrade in guidance. In October 2025, management projected an order book of INR14,000-15,000 crores by March 2026 and FY27 EBITDA margins of 8-9%; by May 2026, the order book reached INR13,447 crores and FY27 EBITDA guidance was narrowed to 7-8%. Similarly, FY26 revenue was initially targeted at INR3,100-3,200 crores, but nine-month revenue stood at only INR1,978 crores, and Q3 EBITDA margin fell to 6.73% against the 8-9% promise. Timelines on large external projects like the Commonwealth Games tenders and the Matunga Dharavi project have repeatedly slipped by quarters. While the order book has grown significantly year-on-year, the consistent failure to meet margin and revenue run-rate targets indicates structural execution challenges rather than isolated delays.
Earnings visibility hinges entirely on the successful deployment of labor and the timely execution of Adani projects, which account for 45% of quarterly revenue despite comprising 70% of the backlog. The quantified path requires growing revenue over 25% to reach INR4,500 crores in FY27 while simultaneously expanding EBITDA by over 150 basis points from current levels. The single most important falsifier is the company's inability to manage its working capital and labor constraints, evidenced by the working capital days stretching to 90-100 days against a targeted 60-70. If seasonal labor migration continues to inflate employee costs to 5.39% of sales and government receivables remain stuck, the guided operating leverage will fail to materialize, trapping the business in a low-margin, high-execution-risk cycle.
companyname: PSP Projects Limited ticker: PSPPROJECT sector: Engineering, Procurement and Construction (EPC) / Building Construction PSP Projects is a building construction company founded in 2008 by Prahaladbhai Patel, a civil engineer with four decades in construction. It operates in the Engineering, Procurement and Construction (EPC) space but only in buildings: offices, hospitals, schools, residential towers, airports, industrial plants, temples. The company does not do roads, bridges or he...
Read the full report →capex, margin expansion, debt reduction
FY27 revenue guided at INR4,500 crores with EBITDA margins of 7-8%
Guidance upgradedmixed
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