Rs 24,253 Crore Order Book: Rail Infrastructure Company Bags Two Tunnel Orders Worth Rs 872 Crore From Rail Vikas Nigam Ltd

With a PE ratio of 19.6x, the company trades at a premium valuation compared to the industry PE of 19.3x. The company has ROCE of 18.2 per cent and ROE of 16.4 per cent.

Ircon International Limited, in a joint venture with SSNR Projects Private Limited, has been awarded a significant contract by Rail Vikas Nigam Limited. This project involves the construction of two tunnels and related infrastructure for a new electrified broad-gauge railway line between Mangliyagaon and Budni stations in Madhya Pradesh. The total contract value is Rs. 872.69 crore, with Ircon's share amounting to Rs. 610.88 crore. The project is expected to be completed within 40 months, with an additional six months for the defect liability period. This award highlights Ircon's continued strength in securing large-scale infrastructure projects within India.

Ircon International Limited, established in 1976, is a prominent player in the engineering and construction sector, specialising in large infrastructure projects. The company achieved 'Navratna' status in October 2023, reflecting its significant role in the public sector. Ircon's service portfolio includes EPC, PPP, and PMC services, with a strong focus on railways, highways, and real estate development. In FY24, the company reported a revenue mix of 84 per cent from railways and 16 per cent from highways and other sectors. Ircon has completed over 400 projects in India and 128 internationally, showcasing its extensive experience.

The company maintains a robust order book of Rs. 26,000 crore, with 91 per cent from domestic clients. Despite an increase in debt to Rs. 2,570 crore, Ircon holds cash reserves of Rs. 5,000 crore. The company is expanding internationally and diversifying into new areas like solar and hydropower, aiming for a PAT margin of 7 to 7.5 per cent and stabilising EBITDA margins between 6.5 to 7.5 per cent in FY25.

In the Quarterly Results of December 2024, the revenue stood at Rs 2,612.86 crore, reflecting a YoY decline of 10.81 per cent but a QoQ growth of 6.76 per cent from Rs 2,447.52 crore in September 2024. The net profit for December 2024 was Rs 86.59 crore, showing a YoY decline of 64.61 per cent and a QoQ drop of 57.96 per cent from Rs 205.95 crore in September 2024. The net profit margin for December 2024 was 3.31 per cent, compared to 8.41 per cent in September 2024 and 8.35 per cent in December 2023.

For the full-year FY24 results, the revenue stood at Rs 12,330.91 crore, reflecting a growth of 18.93 per cent from Rs 10,367.93 crore in FY23. The net profit for FY24 was Rs 763.40 crore, registering a decline of 2.27 per cent from Rs 343.88 crore in FY23. The net profit margin for FY24 stood at 2.79 per cent compared to 3.39 per cent in FY23.
As of December 2024, the shareholding pattern shows that promoters hold 65.17 per cent, FIIs hold 4.09 per cent, increased from 3.94 per cent, DIIs hold 1.44 per cent, government holding is at 0.28 per cent, and the public holds 29.03 per cent.

With a PE ratio of 19.6x, the company trades at a premium valuation compared to the industry PE of 19.3x. The company has ROCE of 18.2 per cent and ROE of 16.4 per cent.  

Investors must keep this Small-Cap stock on their radar.

Disclaimer: The article is for informational purposes only and not investment advice.