PSP Projects Share Price Falls 17% to 2-Month Low on Weak Q1 Results and Labour Shortage

On August 4, 2025, PSP Projects share price (NSE: PSPPROJECT) dropped 17% to ₹626.60 in intraday trade, marking a 2-month low. This steep fall came after the company reported disappointing Q1 results. 

PSP Earnings Q1 Earnings Hit by Labour Shortage and Monsoon

For Q1FY26, the company’s revenue dropped 17% YoY to ₹517.8 crore due to labour shortages and delays in project execution. Factors such as early monsoons in Gujarat, the wedding season, and post-March labour migration further impacted work progress. On a quarter-on-quarter basis, revenue rose 23%.

Operating Profit and Net Profit Decline Sharply

EBITDA fell by 66% YoY to ₹24.8 crore, and net profit plummeted 99% YoY to just ₹37 lakh. Even sequentially, both figures showed a significant drop. The fall in profitability was also due to higher employee costs, rising to 6.8% of revenue, against the usual 4–5%.

Labour Shortage Continues, But Management is Confident

The company reported a 37% labour shortfall during April–May 2025. This has now reduced to 19%, and management expects the situation to improve further in August. Most newly won projects (especially from Adani Group) are still in the initial phase, requiring heavy labour deployment—adding pressure on costs.

Strong Order Book Despite Current Challenges

PSP Projects maintains a robust order book of ₹6,514 crore, up 11% YoY. Of this, 27% are Adani-related projects, and the remaining 73% are from other clients. The company is optimistic about execution in the coming quarters.

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Adani Group Increases Stake

Adani Infra (India) Ltd acquired 4.49 million equity shares (11.32%) through an open offer and is also set to buy another 9.68 million shares (24.41%) from PSP’s promoters. This will take Adani’s total stake to around 35.7%.

Conclusion

PSP Projects has taken a hit on the stock market due to weak Q1 earnings driven by project delays and labour challenges. However, the company continues to hold a strong order book and is backed by the Adani Group’s growing ownership. If labour availability improves and project execution accelerates, recovery may be on the horizon in the upcoming quarters.

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