Garuda Construction & Engineering Q2 Results & Analysis
Here is the latest quarterly update of Garuda Construction & Engineering Limited along with an easy-to-understand breakdown of key metrics, comparisons and whether this is worth following for investors.
About the company and sector: Garuda Construction & Engineering (NSE / BSE code: GARUDA) operates in the construction & engineering domain, covering turnkey civil works, residential & commercial buildings, infrastructure and allied services. The construction industry is cyclically linked to real-estate demand, infrastructure spends, raw-material and labour costs, and overall economic momentum.
Key Q2 Results Summary
| Metric | Value | YoY / Notes |
|---|---|---|
| Revenue | ₹ 116 crore approx. | Up ~149% vs ~₹ 47 crore (your input) |
| Net Profit | ₹ 27 crore approx. | Up ~166% vs ~₹ 10 crore |
| EBITDA | ₹ 34.45 crore approx. | Up ~157% vs ~₹ 13.46 crore |
| EBITDA margin | ~29.6% | Improved ~85 basis-points vs ~28.7% |
Here are additional validated numbers from third-party sources: According to Moneycontrol, revenue for June‐25 quarter was ₹125.16 crore (up ~256% YoY) and net profit ~₹28 crore (up ~224% YoY). 0
What These Metrics Mean (in simple language)
- Revenue growth: This shows how much the company’s top line (sales) has increased compared to the same quarter last year. Big growth means more business scale.
- EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortisation): A measure of operating profit before finance cost & tax. Represents how well the core business is performing. A rise from ~₹13.46 crore to ~₹34.45 crore means strong operating growth.
- EBITDA margin: EBITDA divided by revenue, expressed in %. A margin of ~29.6% means for every ₹100 of revenue, ~₹29.6 is operating profit. A +85 bps (basis points) improvement is positive.
- Net Profit: Final profit after all costs. Growth here shows overall profitability improvement.
Peer Comparison
In the construction sector the peers might include companies like Candor Infrastructure, Sobha Ltd, Larsen & Toubro (L&T), though Garuda is smaller in scale. A simplified comparison:
| Company | Revenue growth (latest quarter) | Profit margin approx. |
|---|---|---|
| Garuda Construction & Engineering | ~+149% to +256% (depending on source) | ~29.6% EBITDA margin |
| L&T / larger peer | Typically mid-single or low-double digit growth (major base) | Lower margin (industry average perhaps ~15-20% for large diversified player) |
Interpretation: Garuda’s growth is much higher percentage-wise because of smaller base. Its margin at ~30% is strong in this sector — signalling good operational leverage — but small size means more volatility.
SWOT Analysis
| Strengths | Weaknesses |
|---|---|
| Rapid revenue and profit growth | Relatively small size compared to large construction players → higher risk |
| High-margin business (~30%) indicates operational efficiency | Construction sector is cyclical and vulnerable to cost inflation (materials, labour) |
| Order book growth and new contracts (e.g., large rehabilitation/infrastructure orders) reported. 1 | Margin improvement is modest (+85 bps) — large jump in growth may be from low base, sustainability needs monitoring |
| Improved profitability signals better cash conversion potential | Sensitive to tender wins, execution risk, project delays and regulatory / site approvals |
| Opportunities | Threats |
|---|---|
| Large infrastructure push in India supports order flow | Raw-material price inflation (steel, cement) could squeeze margins |
| Urban redevelopment, rehab projects offer new growth streams (company has contracts) 2 | Competition from larger, organised players may pressure pricing and margins |
| Expanding scale may lead to better bargaining / supplier terms | Execution risk / project delays could lead to cost overruns and profit erosion |
| Potential for margin expansion if scale and efficiencies improve | Macro headwinds (interest rates, housing slowdown) may impact new orders |
Key Risks & Considerations
- A significant portion of the growth is from a small base — sustaining high growth rates will become harder as the business gets larger.
- Construction sector cost volatility (steel, cement, labour) can quickly erode margins.
- Tender-based business means that order flow and contract wins are critical; any slowdown in new contracts will impact future revenue.
- Project execution risk is always present in infrastructure/rehabilitation segments — delays or cost escalations can hit profitability.
- Valuation risk: A small company with high recent growth may already have expectations built in; margin for error is limited.
Final Verdict
Garuda Construction & Engineering has shown impressive growth in the recent quarter: revenue and profit both more than doubled year-on-year and the margin continues to improve. For someone looking for exposure to a fast-growing smaller construction player with good growth potential, this company stands out.
However, given the risks of size, sector cyclicality, cost pressures and execution uncertainty, it would be prudent to approach with caution. If you are comfortable with moderate risk and have a longer time-horizon (say 3-5 years), this could be a useful add to a portfolio as a “growth in infrastructure/rehab construction” play. For those seeking steady, low-volatility stocks, a more established larger player might be preferable.
In simple terms: The company is delivering, the growth is real — but the risk is elevated, so position size should be managed accordingly.
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Investor Take-away
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser notes that while Garuda Construction & Engineering’s strong recent results are encouraging, investors should keep in mind the inherent risks of smaller-cap construction stocks. Ensure you evaluate the company’s next quarterly order inflow, margin stability in rising cost environment, and execution track record. A balanced approach is recommended — potentially allocate a smaller portion of your growth portfolio rather than full exposure. Discover more analytical perspectives and fact-based guidance at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Construction Sector Stocks
- How important is EBITDA margin in a construction company?
- What should investors look for in the order book of a construction firm?
- Why do construction stocks often see volatile profits despite high revenues?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
