PETALING JAYA: Gamuda Bhd
’s earnings trajectory is expected to strengthen over the next few years on a robust construction order book, expanding data centre (DC) opportunities and a sizeable property pipeline.
These factors are expected to position the group for accelerated growth beyond the near-term plateau anticipated for the financial year ending July 31, 2026 (FY26).
Research houses broadly agree that the group’s sizeable outstanding contracts provide strong earnings visibility.
Gamuda currently holds an order book of about RM44bil, which analysts say underpins multi-year revenue generation while new infrastructure and digital economy projects provide replenishment opportunities.
CIMB Research noted the contractor has already secured RM14bil worth of new contracts year-to-date for FY26.
The research house said the pace of wins places the group on track to meet its end-2026 order book target of RM50bil and achieve a doubling in construction revenue to RM25bil by FY28 from RM12.5bil in FY25.
CIMB Research said prospects in the DC segment have improved, particularly after renewed investment commitments by global technology firms.
“Gamuda has turned more constructive on DC contract flows, with a leading multinational technology company recently expressing its commitment to scale up investments in Malaysia.
“Consequently, Gamuda is scouting for more DC jobs by offering comprehensive turnkey solutions that may include the prospecting of land sites suitable to house large-scale DC campuses,” it added.
Potential contract opportunities in FY26 include the Ulu Padas Water Supply Scheme, worth RM5bil to RM6bil, the Northern Perak Water Supply Scheme, valued at about RM5bil, additional mass rapid transit works in Taiwan, estimated at RM2bil to RM3bil, as well as renewable energy, water, road and rail tenders across Malaysia, Australia and New Zealand.
One analyst told StarBiz that Gamuda would likely remain a favourite for those seeking exposure to high-complexity infrastructure and resilient property developments.
“As more projects progress, especially large-scale domestic works, earnings visibility is set to improve significantly in the years ahead,” he said.
Maybank Investment Bank Research (Maybank IB) expects earnings momentum to strengthen as projects progress along the typical execution curve.
It said: “Our earnings estimates are premised on annual job wins of RM25bil per annum and FY26/FY27/FY28 property sales of RM4.5bil/RM13.2bil/RM8.5bil.
“We expect earnings to ramp up as it moves up the ‘S’ curve.”
It added that Gamuda is exploring DC opportunities in Bandar Springhill, Negri Sembilan, and another site in Selangor that could be executed more quickly.
Maybank IB has kept its “buy” call and target price at RM5.30 on Gamuda.
RHB Research highlighted that the group would need to replenish roughly RM20bil of new contracts in calendar year 2026 to sustain its targeted RM50bil order book by end-2026.
Among the projects under watch are the Sabah water supply scheme valued at RM3bil to RM4bil, Queensland’s Direct Sunshine Coast Rail Line and potential DC jobs in Negri Sembilan.
The research house maintained a “buy” call with an unchanged target price of RM6.26.
On the property front, CIMB Research said sales slipped 9% year-on-year to RM1.6bil in the first half of FY26 as launches at Gamuda City were deferred.
However, momentum could improve later in the year, supported by newly acquired land plots in Vietnam earmarked for quick-turnaround projects with a combined gross development value of RM4.1bil.
Balance sheet gearing has risen following land acquisitions and ongoing reclamation works at Penang Silicon Island.
CIMB Research said net gearing climbed to 68% as at Jan 31, 2026, and could briefly exceed the company’s 70% internal ceiling before improving as cash inflows materialise.
“We project the net gearing ratio to quickly improve to 42% (FY26: 61%) in FY27 via expected cash inflows of about RM1bil from its Vietnamese property operations in one year’s time,” it added.
Across the analyst community, sentiment remains positive despite some earnings revisions.
Hong Leong Investment Bank Research maintained a “buy” rating with a lower target price of RM5.60, compared with RM6.88 previously, after trimming forecasts, while TA Research reiterated its “buy” call with a revised target price of RM5.98 from RM6.17 previously, citing the contractor’s strong execution record and entrenched position in complex infrastructure projects.
MBSB Research kept its “buy” recommendation with an unchanged target price of RM5.86, noting the group’s geographically diversified portfolio and expanding utilities footprint, aimed at rebuilding recurring income streams.
Meanwhile, BIMB Research maintained a “buy” call with a revised target price of RM6.11 from RM6.29 previously, saying the contractor’s RM44bil order book, growing Australian infrastructure presence and deepening Vietnam property pipeline should support medium-term earnings growth.
CIMB Research maintained its “buy” recommendation on Gamuda, with an unchanged target price of RM6.20, forecasting the group’s core earnings to rise 22% to RM1.2bil in FY27 before accelerating 35% to RM1.7bil in FY28 as profits from upcoming property launches are progressively recognised.
