Ircon International’s Shares Rise After Securing ₹751 Crore Order from RVNL
New Delhi, July 5, 2024:** Railway infrastructure company Ircon International Limited (IRCON) witnessed a surge in its share price on Friday after it secured a major contract worth ₹750.8 crore from Rail Vikas Nigam Limited (RVNL).
Details of the Project
Under this contract, IRCON will undertake the design, supply, installation, testing, and commissioning of a broad gauge ballastless track (BLT) for a new 125 km BG line between Rishikesh and Karanprayag in Uttarakhand. The scope of work also includes supplying ballast and installing the track, excluding the provision of rails and track sleepers.
The project is expected to be completed within 42 months and will be executed by a joint venture between IRCON, Paras Railtech Private Limited, and PCM Strescon Overseas Ventures Limited with a shareholding ratio of 60:25:15 respectively.
Impact on Share Price
Following the announcement of the contract, Ircon International’s shares jumped by over 3% on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), reaching an intraday high of ₹288.6. The surge in share price reflects the market’s positive sentiment towards the company and its ability to secure new business.
Financial Performance
In its recent quarterly report for the period ending March 31, 2024, IRCON International reported a 15.1% year-on-year (YoY) increase in net profit to ₹285.6 crore. The company’s total revenue grew by 0.6% to ₹3,796.59 crore during the period. As of March 31, 2024, the company’s order book stood at ₹27,208 crore.
Outlook for IRCON
Analysts remain bullish on IRCON International, citing its strong order book, diversified portfolio, and experience in executing large-scale infrastructure projects. The company’s focus on railway and highway construction is expected to benefit from the government’s infrastructure development initiatives.
In addition, IRCON’s growing presence in international markets is seen as a potential growth driver. The company is actively pursuing projects in neighboring countries and the Middle East, and has a target to increase its revenue and order inflows over the next few years.
Conclusion
The ₹750 crore order from RVNL is a significant win for Ircon International and reinforces the company’s position as a leading player in the railway infrastructure segment. The contract is expected to boost the company’s financial performance and provide a positive outlook for investors.