PETALING JAYA: Construction firm Binastra Corp Bhd
’s margins are expected to improve, supported by the retreat in building material and diesel prices while a solid pipeline of projects from data centres (DCs) and renewable energy infrastructure is expected to provide earnings visibility.
Analysts remain positive about the company’s outlook following its first quarter ended April 30, 2026 (1Q27), results released last Thursday, which mostly met expectations.
The company has an outstanding order book of RM6.8bil with a replenishment target or RM2bil for the financial year ending March 31, 2027 (FY27.
UOB Kay Hian Research said the company “is well positioned for record-high earnings levels throughout FY27 to FY29”. It maintained a “buy” call and a target price (TP) of RM2.68, pegged to FY27 valuations.
The research house noted that exposure to DC projects, complemented by the 51% acquisition of LF Lansen Sdn Bhd, a DC infrastructure and engineering, procurement, construction and commissioning outfit, reinforces its technical capability and track record. The company has secured RM1.9bil in DC projects.
Mercury Securities, which reiterated a “buy” call but raised its TP higher to RM3.12, expects sequential improvement in 2Q27 earnings supported by stronger execution momentum and steady order book conversion.
“Near-term margin dynamics could also see some relief from moderating diesel prices in recent weeks, following easing geopolitical tensions and a gradual normalisation in energy-related cost pressures,” it said, adding that the RM6.8bil order book provides robust revenue visibility and underpins earnings stability.
“Looking ahead, FY27 earnings are expected to improve, driven by more stable execution progress and a more balanced project mix, which should support gradual earnings normalisation and margin stability,” it said.
Phillip Capital said Binastra’s management has also highlighted longer-term opportunities to move beyond its role as a contractor and become an asset owner of solar farms and DCs that can generate recurring income and strengthen its revenue stream.
“Binastra intends to prioritise DC and green-related projects, while executing its sizeable RM5bil residential order book (which accounts for 75% of its current order book),” it said.
The brokerage reiterated a “buy” rating and raised its TP to RM2.73 from RM2.63.
“We gather that material costs have retreated from their peak in April 2026 amid de-escalating geopolitical tensions, with selected raw materials already reverting below pre-war level in February 2026,” it added.
TA Research said the company is eyeing one to two new DC-related jobs in FY27, and that management has indicated it will continue to explore mergers and acquisitions, with a focus on the DC construction space. It maintained a “buy” call with an unchanged TP of RM3.04.
RHB Research said the company’s 51%-owned subsidiary LF Larsen may likely reach a profit after tax (PAT) of RM15mil to RM20mil in FY27, versus the 10-month FY26 PAT of RM9.2mil, with RM150mil in its order book as at end-April.
It maintained a “buy” call and revised its TP to RM3.10 from RM2.72.
