Monadelphous Group's (ASX:MND) margins for fiscal 2026 were a "strong" beat, although it remains unclear if the company can sustain those levels, as the company's revenue is expected to step down over the next two years due to the roll-off of maintenance contracts, according to a Wednesday note by Jefferies.

On Tuesday, the company reported fiscal first-half earnings of AU$0.6462 per share and revenue of AU$1.44 billion.

The company expects fiscal 2026 revenue to be about 30% higher than last year and to maintain its fiscal first-half operating margins, Jefferies noted.

Jefferies maintained the company's underperform rating and raised its price target to AU$23 from AU$21.

Shares of Monadelphous Group fell past 5% in recent Wednesday trade.