Garuda Cons

Continue prioritising niche, high-margin projects and avoid contracts that could dilute margins.

Complete the landmark Gruha 5-star rated project in FY26-27. — target: Completion during FY26-27 (+4 more commitments)

Complete the International State-of-the-Art Convention Centre at Gorakhpur within the next 30 months. — target: Project completion within 30 months (+2 more commitments)

Expand into development projects in addition to civil construction. — target: Current order book includes 14 development projects: 7 residential, 2 commercial, 3 infrastructure and 2 industrial (+1 more commitment)

Strengthen project execution capabilities through adoption of the latest technology.

The order book expanded from Rs. 1,400 crore at IPO to Rs. 3,461 crore by October 2025, a 2.5x increase. The company also added approximately Rs. 353 crore of fresh orders during Q2 FY26. This strengthens revenue visibility and supports the later baseline assessment of a moderate execution moat. (1 expanding)

Industrial and infrastructure work became a meaningful revenue contributor, increasing from 0% in FY25 to 18% in H1 FY26. This reflects a favorable diversification away from dependence on commercial buildings, supported by the Gorakhpur convention centre, Rapti Nagar township and sports city, hydro project, and agro-processing cluster. (1 new)

Construction-service revenue increased from Rs. 21,653.01 lakhs in FY2024-25 to Rs. 52,111.52 lakhs in FY2025-26, making it the dominant revenue engine. This is a substantial expansion of the core business. (5 expanding across 2 engines)

In FY2024-25, Garuda disclosed active projects across five residential, two commercial, one residential-cum-commercial, one industrial, one infrastructure and one civil-construction-cum-services project. The later baseline continues to describe a broader multi-sector execution track record, including residential, hospitality, infrastructure and EPC work. The capability moat is therefore expanding in demonstrated project breadth, although it remains moderate rather than dominant. (2 expanding, 1 stable)

FY2024-25 management stated that it had not reported technology absorption or research-and-development spending, while also discussing adoption of modern construction technologies and digital project-management tools. The later baseline still describes technology adoption as unquantified and weak. There is no concrete evidence of a measurable technology moat developing. (2 stable)

The business is becoming more diversified. Industrial and infrastructure revenue increased from 1% in FY23 and 7% in FY24 to 5% in FY25 and 18% in H1 FY26. The government/private mix also moved from strongly private-led in FY23-FY24 to a more balanced 52% private and 48% government in H1 FY26. This is a positive, newly visible diversification trend, although the latest mix is only available for H1 FY26. (1 accelerating across 1 signal)

The order book has expanded sharply to Rs. 3,461 crore, 2.5 times the Rs. 1,400 crore level at IPO. Q2 FY26 added Rs. 353 crore of fresh orders, indicating continued strong order traction. However, only one current-quarter inflow figure is provided, so the acceleration assessment is based mainly on the large cumulative expansion. (1 accelerating, 1 new trend across 2 signals)

Garuda has a sizeable development pipeline of 14 projects: seven residential, two commercial, three infrastructure and two industrial. The document provides no earlier comparable pipeline count, so this is a new trend in the disclosed growth profile rather than a measurable multi-quarter acceleration. (1 new trend across 1 signal, 2 leading indicators)

Garuda reports 16 ongoing projects across multiple states and uses an asset-light model, meaning it relies on third-party equipment, materials and labour rather than owning heavy machinery. The model supports scaling, but the document gives no earlier quarterly project-count series. Fixed assets remain very low at Rs. 1.7 crore as of September 2025, confirming the capital-light structure. (1 new trend across 1 signal, 1 leading indicator)

Growth is being achieved with strong profitability, although margins are slightly lower than the previous year as the company scales. H1 FY26 EBITDA was Rs. 70.8 crore, with a 29.3% margin, while PAT was Rs. 55.1 crore, with a 22.8% margin. — EBITDA and PAT margins: EBITDA margin down 130 bps YoY; PAT margin down 30 bps YoY

Revenue and profit depend heavily on management estimates of project completion and total cost. If costs rise, claims are rejected, or completion estimates change, previously reported revenue and profit may have to be reduced. [EXECUTION]

FY25 material consumption rose to Rs. 4,284.26 lakhs from Rs. 936.34 lakhs, while construction expenses increased to Rs. 9,666.41 lakhs from Rs. 8,500.22 lakhs. The company explicitly identifies raw-material price volatility and cost escalation as risks, but its disclosures state that commodity-price risk and hedging are not applicable. The FY26 baseline shows much higher materials and construction expenses, together around 66% of revenue, confirming greater cost sensitivity. This risk intensified. (3 intensifying, 1 high-severity)

FY25 standalone contract assets were Rs. 9,613.25 lakhs, equal to about 42.7% of standalone operating revenue of Rs. 22,503.01 lakhs. This was a new and material balance compared with nil contract assets in FY24. The later FY26 baseline reports standalone contract assets of Rs. 21,891.23 lakhs, about 41% of revenue, and consolidated contract assets of Rs. 26,794.66 lakhs. Thus, the risk emerged in FY25 and increased substantially in absolute value by FY26, even though the ratio to revenue remained broadly similar. (5 intensifying, 5 high-severity)

The October 2025 presentation shows a rapid scale-up: H1 FY26 revenue reached Rs. 241.6 crore against Rs. 81.9 crore in H1 FY25, while the order book expanded to approximately Rs. 3,461 crore. This increases the amount of future revenue and profit dependent on execution estimates across multiple projects. The presentation does not disclose contract-asset balances, project-level cost-to-complete estimates, claims, or provision coverage, so deterioration cannot be quantified. The later baseline confirms that contract assets and revenue had become substantially larger, indicating that the underlying estimation exposure increased over time. (1 intensifying, 1 stable, 1 high-severity)

FY25 construction expenses were Rs. 9,666.41 lakhs, including labour and works contract charges of Rs. 9,216.73 lakhs, while material consumption was Rs. 4,284.26 lakhs. Together these costs represented about 61.8% of operating revenue. Management specifically identifies subcontractor dependency, labour availability, raw-material volatility and cost escalation as key industry risks. The FY26 baseline shows labour and works contract charges of Rs. 19,494.78 lakhs and materials consumed of Rs. 14,492.33 lakhs, together about 66% of revenue. Cost exposure therefore increased and the risk intensified. (3 intensifying, 1 high-severity)