Afcons shifts focus to Europe, Middle East amid Africa slowdown
The Shapoorji Pallonji Group company is awaiting the formal award for three Croatian bids worth over ₹11,300 crore, which will be crucial for increasing its international order book share from the current 12%.
MUMBAI : Leading infrastructure player Afcons Infrastructure Ltd is exploring opportunities in the Eastern European and Balkan regions to offset a slowdown in business from its conventional overseas markets, including Africa and India's neighbouring countries.
The Shapoorji Pallonji Group company had taken a similar call earlier this year to increase its presence in the lucrative Middle Eastern market, albeit with local partners. It had so far limited its exposure to the region, citing unfavourable contract terms.
Afcons is the most bullish on Saudi Arabia and the United Arab Emirates in the Middle East. In Saudi Arabia, it established a 90:10 joint venture company with a local partner in July 2023, called Afcons Contracting Co., to handle local projects.
In July, Afcons emerged as the lowest bidder for three projects in Croatia, which are cumulatively worth over ₹11,300 crore and are to be executed over 42-72 months. The company has yet to be formally awarded the contracts, which it expects to receive before December.
These include the development of a railway line and the construction of two stretches of a highway project.
The company will be competing with key European, American and Turkish contractors active in the region.
For context, Afcons’ FY25 revenue was ₹12,548 crore with a profit of ₹487 crore.
"As a global EPC company, we consistently explore new geographies to support growth and risk mitigation," said Hitesh Singh, vice president and head, corporate strategy, Afcons Infrastructure Ltd.
“Historically, our key international business has been in Africa and neighbouring regions. As part of our overseas strategy, amid some uncertainties in neighbouring areas and funding slowdowns in Africa, we continue pursuing opportunities across areas like Eastern Europe and the Balkans, as well as select prospects in the Middle East."
The company’s three bids in Croatia were part of this approach, he added.
Turmoil in the neighbourhood
Afcons traditionally got about 30% of its business from overseas, mainly from Africa and from India’s neighbouring countries. However, the share of international business dipped in recent years amid a slowdown in business from Africa. The political turmoil in India’s neighbourhood—with governments being toppled in Bangladesh and Nepal recently and an economic slowdown in Sri Lanka—has also reduced business visibility in these regions.
Paramasivan Srinivasan, managing director Afcons, said in an earnings call on 8 August that the orders from Croatia and a few more international orders will take the overseas share of the company’s pending order book to the stated guidance of 30% by the end of FY26.
As of June 2025, only 12% of the company’s ₹35,311 crore orderbook was from overseas.
The company is actively seeking new business opportunities overseas. A third of Afcons’ ₹3.4 trillion addressable project pipeline for the next two years was from international orders, Srinivasan said during the call. An addressable pipeline refers to projects that the company plans to bid on in the near future.
“Afcons is on track for a stronger H2FY26, supported by conversion of large L1 wins and ramp-up in fast-track projects," analysts at Elara Capital led by Ankita Shah noted on 9 August.
The company has provided revenue growth guidance of 20-25% for FY26, with an expected ramp-up in execution in the latter half of the fiscal year, as fast-track orders and key projects are anticipated to gain momentum. This comes after its FY25 revenue was 5% lower than the preceding year.
Afcons Infrastructure closed at ₹449.90 on the BSE on Friday. The scrip has lost nearly 17% since the beginning of the year.
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