Gamuda Target Price Lifted as Order Book Hits Record RM61 Billion

Kenanga Research has maintained its Outperform rating for Gamuda Bhd, simultaneously raising its target price to RM5.90 following the company's disclosure of a record-breaking construction order book now valued at RM61 billion.

The upward revision by the research house reflects optimism surrounding the group’s project pipeline, which spans both domestic and international markets. According to the original publisher, the move is supported by a steady accumulation of high-value infrastructure contracts and an increasing strategic focus on the renewable energy sector.

Financial results for the group indicate a consistent growth trajectory, with FY2026 net profit rising by 5% year-on-year to reach RM1.05 billion. Kenanga Research noted that these earnings were broadly in line with market expectations, successfully meeting 100% of their projected estimates for the period.

Beyond the raw figures, Gamuda’s expansion into renewable energy is being closely watched as a diversification strategy. This pivot aims to balance the cyclical nature of the construction industry with steady, long-term utility-scale revenue streams, a move that analysts believe provides a more resilient business model against external economic shocks.

For the average Malaysian, the implications of this expansion are multi-faceted. As one of the nation's largest infrastructure players, Gamuda’s continued success serves as a barometer for the broader construction sector, which is a major employer of local skilled labour. With the national unemployment rate currently holding steady at 3.0%, a robust order book suggests sustained demand for engineering and project management roles, providing long-term career stability for local professionals.

Furthermore, investors may view this development as a positive signal for the Bursa Malaysia infrastructure index. As Malaysia navigates a moderate headline inflation environment of 1.9%, the ability of a major entity to maintain growth amidst rising operating costs—such as fuel prices like the current RM5.42 for diesel—reflects effective project execution and inflationary hedging strategies that could benefit shareholders.

This performance arrives at a time when the broader Malaysian economy is showing resilience, anchored by a strong real GDP growth of 6.0% in the latest quarter. Gamuda’s ability to secure large-scale projects aligns with the government’s push for high-impact infrastructure investment, which is intended to maintain the country’s competitive edge in the region.

Looking ahead, the market will likely focus on the speed at which the RM61 billion order book is converted into revenue. The transition from securing contracts to project completion remains the most critical factor in sustaining the current growth momentum. Whether the company can effectively manage project margins amidst global supply chain volatility will be a key metric for institutional and retail investors alike.

What remains unconfirmed, however, is the specific breakdown of the international project timeline and the exact capital expenditure required to fully realize the company’s stated ambitions in the renewable energy sector.