HCC shares halt 4-day losing run, jump 10% today; here's why

Shares of Hindustan Construction Company Ltd (HCC) rose sharply in Wednesday's trade, pausing their four-day losing run. The stock jumped 10.10 per cent to hit a day high of Rs 14.06 over its previous close of Rs 12.77. The scrip has declined 34.31 per cent so far this year compared to the benchmark Sensex's 5.60 per cent dip.

Today's sharp movement in the share price came after the company announced that it has completed the sale of Baharampore-Farakka Highways Ltd. HCC Group closed its sale of Baharampore-Farakka Highways Limited ('BFHL') to Singapore-based Cube Highways and Infrastructure V Pte ltd ('Cube') at an enterprise valuation of Rs 1,323 crore, which includes special purpose vehicle (SPV) debt of Rs 646 crore, the company stated in an exchange filing.

"HCC Group is to receive a total of Rs 941 crore which includes an upfront amount of Rs 677 crore and Rs 264 crore payable by Q3 FY24 and Q1 FY25 in two tranches, contingent on traffic projections. Additionally, as part of the agreement with Cube, HCC will be entitled to a revenue share from BFHL over the entire concession period, which is material in nature," it further said.

Arjun Dhawan, Vice Chairman of HCC, said, "HCC is proud to have developed the backbone of West Bengal's arterial highway on NH-12. Our concessions portfolio has been a value generator for the group and this asset sale underscores the material liquidity contribution toward our operations and growth."

The company mentioned that the legal and financial advisors for this transaction were Cyril Amarchand Mangaldas and Edelweiss Financial Services, respectively.

At today's high price of Rs 14.06, HCC traded 38.06 per cent lower from its 52-week high of Rs 22.70, a level seen on December 20 last year. That said, it traded 33.40 per cent higher than its one-year low level of Rs 10.54, hit on June 20, 2022.

On the technical front, the stock was last seen trading lower than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 42.57. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 9.25.

HCC has a one-year beta of 1.22, indicating high volatility.

The HCC Group, with a group turnover of Rs 10,669 crore, comprises HCC, HCC Infrastructure and Steiner AG in Switzerland. And, BFHL was incorporated on March 11, 2010, to design, build, finance, operate and transfer the toll of the 4-lane highway between Baharampore and Farakka section of NH-12 (earlier NH-34) in West Bengal. It covers 101 km of the busiest section of Bengal's main artery, NH-12, and passes through major towns such as Baharampore, Umarpur, and Dhuliyan.

Meanwhile, Indian equity benchmarks traded higher in afternoon deals today, led by gains in automobile, banks, financials, consumer goods and metal stocks.

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