Dilip Buildcon surges 12% on winning new highway projects from NHAI

The construction cost for developers has gone down with projects being completed within the timeframe, a source said
Dilip Buildcon (DBL) surged 12% to Rs 1,122, also its new high on the BSE, in intra-day trade after the company received highway projects worth of Rs 42.77 billion from the National Highways Authority of India (NHAI).

DBL on Thursday, March 29 said it has won a Rs 10.04 billion road contract from the NHAI in Madhya Pradesh. The project involves construction of road tunnel, viaduct and Churhat Bypass of Rewa Sidhi Section of NH 75E in Madhya Pradesh on build, operate and transfer mode.

The construction period of the project is 18 months. The operation period for the project is 15 years from the commercial operation date, the company said.

On Wednesday, March 28, after market hours, highways builder said it has received letter of award by the NHAI for new three hybrid annuity projects valued at Rs 32.73 billion in the state of Maharashtra.

Analysts at Dolat Capital reiterate ‘buy’ rating on the stock with target price of Rs 1,423 per share.

DBL with its differentiated business model that lays on project selection and execution with operational efficiency continues to remain one of the prime beneficiaries of Government’s Bharatmala project (Rs 6.95 trillion). With its presence across 13 states of India (as on Mar’18) and signing of an agreement with Shrem Group (Aug’17) to exit 100% from its 24 BoT projects for Rs 16 billion, DBL is in much better placed to benefit from an upcoming pick up in the road awarding activity, the brokerage firm said in a report.

In past one year, the stock zoomed 210% as compared to 12% rise in the Sensex, due to constant better performance, reduction in working capital and deleveraging of the balance sheet through the sale of BoT portfolio.

At 10:47 am; DBL was trading 9% higher at Rs 1,087 against 0.23% gain in the benchmark index. The trading volumes on the counter more than doubled with a combined 684,305 shares changed hands on the BSE and NSE so far.

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