Gamuda falls to 11-month low after weaker-than-expected earnings, analysts still bullish

KUALA LUMPUR (March 9): Gamuda Bhd (KL:GAMUDA) fell on Monday to its lowest in nearly a year as investors reacted to weaker-than-expected results at the largest Malaysian construction firm by revenue.

Net income for Gamuda’s first half only accounted for a little over one-third of the street’s full-year forecasts, prompting cuts to earnings estimates. Still, a wide majority of analysts are bullish on the stock, betting on pick up in earnings from a massive order book and prospects of new contracts.

“We anticipate stronger earnings” in the second half of the financial year ending July 2026 as local construction activity accelerates and margins continue to widen, said Kenanga Investment Bank in a note.

Shares of Gamuda, meanwhile, lost as much as 22 sen or over 5% to RM3.93, its lowest since April 2025. The stock was trading at RM3.95 at 10.20am after more than eight million shares changed hands. The company was valued at more than RM23 billion at the last price.

Monday’s fall extended its decline since the start of 2026 to over 20% as Malaysian stocks suffered from a combination of renewed concerns over US tariffs and escalating conflict in the Middle East.

The consensus on Gamuda is still overwhelmingly bullish, with 20 out of 21 research houses tracked by Bloomberg recommending ‘buy’ on the stock. The average 12-month target price, however, has fallen to RM5.62 from RM5.77 before the results were announced last Friday.

For MBSB Research, the slowdown in Gamuda’s revenue growth reflects “the natural progression” of projects’ life cycles rather than delays in project execution.

“We expect a more meaningful step-up in FY2027-FY2028 as projects move into the stronger phase of the project cycle,” the house said, noting that new projects make up a sizeable chunk of its total outstanding jobs worth RM44 billion at the end of its recently-ended quarter.

On its part, Gamuda reiterated its aim to expand its order book to RM50 billion by December 2026 to analysts in a post-results briefing.

“Gamuda should meet the order target,” CGS International said, flagging a pipeline of visible projects such as a Sabah water treatment plant, Penang LRT systems, interstate water transfer from Perak to Penang, data centres, and renewable energy projects locally and in Australia.

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