Stock under Rs 200: Multibagger with outstanding Q2FY23 performance expected to generate 2.5 lakh tons of carbon credit

India is the second largest block manufacturer in the World after China. Indian AAC block Industry is almost entirely unorganised and has around 150-180 plant

BigBloc Construction Limited, one of the leading players in the manufacturing of Aerated Autoclaved Concrete (AAC) Blocks, Bricks and Panels has reported consolidated net profit of Rs. 8.61 crore (PAT margin 17.7 per cent) for Q2FY23, growth of 174 per cent Y-o-Y as compared to the net profit of Rs. 3.14 crore (PAT margin 7.6 per cent) in Q2FY22. Total income during Q2FY23 ended September 2022 was reported at Rs. 48.55 crore, rise of 17.7 per cent Y-o-Y as compared to total income of Rs. 41.23 crore in Q2FY22. EBITDA for Q2FY23 stood at Rs. 13.96 crore (EBITDA Margin 28.8 per cent), rise of 129.7 per cent as against EBITDA of Rs. 6.08 crore (EBITDA Margin 14.7 per cent) in Q2FY22.  EPS for Q2FY23 stood at Rs. 1.20 per share, rise 170 per cent Y-o-Y.

Incorporated in 2015, BigBloc Construction Ltd is one of the largest and only listed company in the AAC Block Space with a capacity of 5.75 lakh cubic meter per annum. Green and non-toxic building construction material, AAC blocks are economical, light weight, thermal insulation, sound proof, fire resistance with superior build quality and saves energy, eco-friendly and economical too compared to the traditional bricks. It is the only company in this segment which generates carbon credits. 

Highlights: - H1FY23 Results

For the six months ended September 2022, company reported consolidated net profit of Rs. 16.97 crore (PAT margin 16.3 per cent) in H1FY23, growth of 289 per cent Y-o-Y as compared to the net profit of Rs. 4.36 crore (PAT margin 6.3 per cent) in H1FY22. Total income during H1FY23 2022 was reported at Rs. 104.15 crore, rise of 49.2 per cent Y-o-Y as compared to total income of Rs. 69.8 crore in H1FY22. EBITDA for H1FY23 stood at Rs. 26.23 crore (EBITDA Margin 25.2 per cent), rise of 179 per cent as against EBITDA of Rs. 9.41 crore (EBITDA Margin 13.5 per cent) in H1FY22. 

India is the second largest block manufacturer in the World after China. Indian AAC block Industry is almost entirely unorganised and has around 150-180 plant with large number of plants especially in Western India. Indian AAC blocks market is expected to grow to Rs.11,000 crore by 2027 registering a CAGR of 14.3 per cent during 2020-27.

Company has also entered in to a joint venture with SCG International Corporation Co. Ltd (SIAM Group) to setup 3 lakh cubic meter per annum facility near Ahmedabad to manufacture AAC blocks and panels with an investment of around Rs. 60 crore. The project is expected to commence from Q1FY24. SCG is one of the largest cement and building material company in South East Asia and will hold 48 per cent in the joint venture with 52 per cent being held by Bigbloc Construction Limited.

Interestingly, total capex for the project at Wada is estimated to be around Rs. 65 crore and company is eligible for 60 per cent subsidy for the project. Company had achieved financial closure for the expansion in the month of July 2022. Post completion of both expansion, company’s total capacities will increase to 13.75 lakh cbm per annum making the company one of the largest players in the country. Company expects to generate around 2.5 lakh tons of carbon credit every year post the expansion.

The stock has skyrocketed about 387 per cent in the last one-year, while on YTD basis the stock is up by 165 per cent. Hence, it turned a multi-bagger. The stock advanced nearly 4 per cent and it registered a fresh 52-week high on Thursday in otherwise an otherwise high volatile market.