Dilip Buildcon rises 5%, hits 52-week high on order wins worth Rs 2,241 cr

Shares of Dilip Buildcom jumped nearly 5 per cent in intra-day trade on Friday, defying the market trend, to scale a fresh 52-week high of Rs 697 on the BSE after the firm emerged as the lowest bidder for orders worth Rs 2,241 crore.

"Dilip Buildcon has been declared as L-1 bidder for two new National Highways Authority of India HAM projects under Bharatmala Pariyojana, Phase I in Tamil Nadu and Puducherry for orders worth Rs 2,241 crore," the company said in a BSE filing. READ HERE

The project involves four-laning of the Viluppuram Puducherry section of NH 45A (New NH 332) and Puducherry-Poondiyankuppam section of NH 45A under Bharatsnala Pariyoiana Phase I.

The company's shares rose following this development, only to pare gains later. At 12.40 pm, the scrip was up 1.83 per cent at Rs 678.95 on the BSE as against a 3.60 per cent fall to 49,204 in the BSE barometer Sensex.

This is the second project in as many as three days in which Dilip Buildcon has emerged as the lowest bidder.


The company, on Wednesday, February 24, had informed exchanges that it was declared as L-1 bidder for two new HAM projects - Bangalore Chennai Expressway - under Bharatmala Pariyojna in the state of Karnataka worth Rs 2,439 crore.

In 9MFY21, the company won projects worth Rs 15,800 crore across six sectors and made its entry into the railway segment. Total order book as of December 2020 stood at Rs 25,500 crore with roads contributing 44 per cent, irrigation 18 per cent, mining 16 per cent and rest between bridge, tunnel, metro, airport and railways.

A large and diversified order book, positive economic outlook, strong execution capabilities and controlled working capital augur well for the company, according to research analysts Mangesh Bhadang and Ash Shah at Nirmal Bang.

"We have increased our target PE multiple for the EPC business from 8x to 10x. We believe that there is further upside potential to our target multiple if the growth visibility improves further. We have marginally tweaked our estimates for the company, which are little changed from the previous one but given the better visibility on earnings and order book, we expect re-rating of the sector along with that of Dilip Buildcon," they added in an earnings coverage report, dated February 15. 

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