IRCON International Share Price Movement Following EPC Contract Win

Market Performance

Shares of IRCON International, a government-owned engineering and construction enterprise, witnessed a 9% increase in early trading on March 18, reaching ₹150.40 per share. This surge followed the announcement of securing a significant Engineering, Procurement, and Construction (EPC) contract.

Over the past eight months, the stock has declined 47%, primarily due to reduced infrastructure spending and profit booking. However, despite this decline, the company's stock has increased 329% over the past five years.

EPC Contract Announcement

According to a regulatory filing, IRCON International, in a joint venture (JV) with Badri Rai and Company (BRC), secured an ₹1,096 crore EPC contract from the Government of Meghalaya. The contract involves the construction of a new secretariat complex in New Shillong City, Meghalaya, along with the development of associated infrastructure.

The project was awarded by the Directorate of Urban Affairs, Government of Meghalaya. IRCON holds a 26% stake in the JV, while BRC holds the remaining 74%.

Financial Performance

For the quarter ending December 2024 (Q3FY25), IRCON International reported the following financial metrics:

• Revenue from Operations: ₹2,612.9 crore, compared to ₹2,929.5 crore in Q3FY24.
• EBITDA: ₹218.3 crore, down from ₹378.1 crore in the previous year.
• EBITDA Margin: 8.1%.
• Net Profit (PAT): ₹86.1 crore, significantly lower than ₹244.7 crore in Q3FY24.

As of December 31, 2024, the company had an order book worth ₹21,939 crore, with contributions from:

• Railway Projects: ₹17,075 crore
• Highway Projects: ₹4,775 crore
• Other Projects: ₹89 crore

Company Overview

IRCON International specializes in railway and highway construction and has executed several projects across India and internationally. The company has a significant presence in Malaysia, Nepal, Bangladesh, South Africa, Algeria, Myanmar, and Sri Lanka. Over the years, it has completed over 128 international projects in 25 countries and 401 projects within India.

Summary

IRCON International's 9% stock price rise follows the announcement of a ₹1,096 crore EPC contract for a secretariat complex in Meghalaya. While the stock has seen recent selling pressure, the company maintains a strong order book and expertise in infrastructure development. Its latest financial report indicates a decline in revenue and net profits, reflecting the challenges in the sector. However, its extensive project portfolio underscores its continued presence in significant infrastructure developments.