As one of Malaysia’s largest construction companies, Gamuda Bhd has seen its share price struggle since the start of the year. The stock fell further in this week after reporting weaker-than-expected earnings, prompting investors to question whether there are deeper concerns within the construction industry.
For FY2026 Q2, Gamuda reported higher profit and revenue, mainly supported by stronger construction activities in Malaysia and solid property sales in Vietnam. Net profit rose 5% to RM230 million, while revenue increased 9% to RM4.3 billion.
Most of the growth came from domestic construction projects, while overseas contributions declined slightly as several Australian projects approached completion. The group’s property segment also delivered encouraging results, particularly from its quick-turnaround projects in Vietnam.
For the first half of the financial year, Gamuda’s net profit grew 5% to RM445 million, while revenue edged up to RM8.1 billion. However, property sales declined as a major development in Vietnam, Celadon City, was completed last year, while several new projects have yet to be launched.
Analysts Remain Cautious but See Potential Second-Half Recovery
Following the results, several analysts trimmed their earnings forecasts and target prices for the company. Nevertheless, some analysts believe earnings momentum could improve in the second half of the financial year, supported by stronger domestic construction activity and improving profit margins.
The recent drop adds to a challenging start for the stock in 2026, with Gamuda shares falling more than 15% since the beginning of the year. The broader Malaysian stock market has also been affected by concerns over potential US tariffs and rising geopolitical tensions in the Middle East, which have weighed on overall investor sentiment.
Despite the recent sell-off, the investment community remains largely optimistic about Gamuda’s long-term outlook. According to ShareInvestor, 19 research houses currently covering the company maintain a consensus target price of RM5.47, although this figure has been revised down by about 15% over the past three months.
Analysts believe the softer revenue growth seen in the latest quarter reflects the natural cycle of large infrastructure projects, rather than structural problems in the business. Construction projects typically move through phases with varying levels of revenue contribution, and Gamuda appears to be transitioning between these stages.
Strong Project Pipeline Underpins Long-Term Growth Outlook
Looking ahead, Gamuda’s strong pipeline of ongoing and upcoming projects continues to support its outlook. As of the latest quarter, the group’s outstanding order book stood at approximately RM44 billion, with newly secured projects making up a significant portion of this total.
The company has also reaffirmed its goal of expanding its order book to RM50 billion by December 2026, which would provide strong revenue visibility in the coming years.
Several potential projects could help Gamuda achieve this target, including a water treatment plant project in Sabah, the Penang LRT system, a proposed interstate water transfer project from Perak to Penang, as well as data centre and renewable energy developments in both Malaysia and Australia.
Taken together, these opportunities reinforce Gamuda’s position as one of the region’s leading infrastructure and engineering players. While short-term earnings volatility and broader market uncertainties may continue to weigh on the stock, analysts generally believe the company’s strong project pipeline and long-term growth prospects remain intact.
For investors, the key question now is whether the expected improvement in construction activity and margin expansion in the coming quarters will be enough to restore confidence and support a recovery in Gamuda’s share price.
Explore the “Consensus Estimate” feature to see what analysts expect next for the company.