PSP Projects (PSPPL IN) – Q4FY26 Result Update – Order book momentum underpin accelerated growth outlook – BUY

PSP Projects delivered a robust Q4FY26 performance, with revenue growing 54% YoY, reflecting strong execution momentum. Reported EBITDA margin stood at 5.4%, impacted by an ECL provision of INR 290mn related to the Kashi project; however, adjusted EBITDA margin remained healthy at ~8.3%. Adjusted PAT (factoring ECL) was broadly in line with our estimates. Order inflows improved to INR 59bn in Q4FY26, with a significant ~85% contribution from the Adani Group, reinforcing visibility on near-term growth. The order book expanded to INR 134bn (~4x TTM revenue) as of FY26, marking a sharp 85% YoY and 47% QoQ increase. Of this, Adani-linked projects account for 67%, while non-Adani projects contribute 33%, providing a balanced growth mix. Post results, we have upgraded our revenue and PAT margin estimates, led by lower interest costs due to interest-free mobilisation advances. Consequently, we raise our FY27E/FY28E EPS estimates by 7%/3%, and revise our target price to INR 956 (from INR 925), maintaining our 18x FY28E PER multiple. The execution pipeline remains strong, with an active bid pipeline of INR 66bn, alongside incremental opportunities of INR 70–80bn expected to materialise in 1HFY27E (Commonwealth-related projects). Following a relatively muted 12% revenue CAGR over FY22–25, we now expect growth to accelerate to ~34% CAGR over FY26–28E, which should support sustained premium valuation multiples.