IRCON share price: Rs 1,096 crore JV order win sends stock soaring 9%

Shares of IRCON International Ltd climbed 9 per cent in Tuesday's trade after the railway firm bagged an EPC contract worth Rs 1,096 crore. The stock climbed 8.82 per cent to hit a high of Rs 150.45 on BSE, slashing its year-to-date losses to 33.08 per cent.

IRCON International said the Rs 1,096.17 crore order is for the construction of a new secretariat complex in Shillong. This venture, secured from the government of Meghalaya, entails the development of campus infrastructure on an engineering, procurement, and construction basis.

The project is expected to be completed within a span of three years. This major contract involves a joint venture between IRCON, holding a 26 per cent stake, and Badri Rai and Co, which holds the remaining 74 per cent share. The announcement marked another addition to IRCON's expanding portfolio in infrastructure development, such as railway construction, roads, buildings, and metro rail works. IRCON's share in the JV is 26 per cent and, hence, in the project is Rs 285 crore.

IRCON's order book stood at about Rs 22,000 crore at the end of December quarter, out of which 53 per cent was on competitive basis and about 47 per cent on nomination basis. In terms its domestic international split, 90 per cent of its order book was domestic and 10 per cent international. IRCON has 11 subsidiaries and 7 joint venture companies.

The company is expected to clock a revenue of Rs 10,000-Rs 11,000 crore in FY25. The company expects its March quarter results to be decent.

"But overall, my margins will decline by about 1.5 per cent to 2 per cent from a short-to-mid-term perspective the moment more competitive jobs come in and I start booking revenue out of that and on a consolidated basis," Director Finance Ragini Advani said in the IRCON's earnings call last month.

On Tuesday, trading volume was healthy with a total of 16.12 lakh shares changing hands, resulting in a turnover of Rs 23.71 crore. From a technical perspective, the relative strength index (RSI) of IRCON International stands at 30.1, hinting at oversold situation.

Market expert Arun Kejriwal, in an interview to Business Today, said he finds IRCON International Ltd and Rail Vikas Nigam Ltd (RVNL) attractive with the railways pack. "These two are good manufacturing companies which are part of the ecosystem which would benefit with the spending that the railway does," he mentioned.