IRCON International, a Navratna public sector enterprise under the Ministry of Railways, witnessed a 9% surge in its stock price during early trading on March 18, reaching ₹150.40 per share. This rally came after the company announced that it had secured a significant Engineering, Procurement, and Construction (EPC) contract.
By 2:30 PM IST, IRCON International’s share price was trading at ₹145.90, reflecting a 5.59% increase from its previous close on the NSE.
Invest in Indian Markets and Unlock Future Potential With 5paisa!Major Contract Win
In an exchange filing on Monday, IRCON International revealed that it had received an EPC contract worth ₹1,096 crore in a joint venture (JV) with Badri Rai and Company (BRC). The contract, awarded by the Directorate of Urban Affairs, Government of Meghalaya, involves the construction of a new secretariat complex along with campus infrastructure in New Shillong City, Meghalaya. IRCON holds a 26% stake in the JV, while BRC holds the remaining 74%.
The project is expected to enhance Meghalaya’s administrative infrastructure and boost the region’s urban development. It also aligns with IRCON’s strategy to diversify its project portfolio beyond railways into civil infrastructure and urban development.
Stock Performance Overview
Despite this recent price rally, IRCON’s stock has been under pressure over the past eight months, witnessing a 47% decline. This drop followed an extraordinary 875% surge between July 2022 and July 2024, driven by a bullish sentiment on railway infrastructure projects. However, a slowdown in railway capital expenditure (capex), weaker financial performance, and profit booking have contributed to the stock’s recent struggles.
For Q3FY25, IRCON reported:
- Revenue from operations of ₹2,612.9 crore, down from ₹2,929.5 crore in Q3FY24
- EBITDA of ₹218.3 crore, declining from ₹378.1 crore in the previous year
- EBITDA margin of 8.1%, reflecting a contraction
- Profit After Tax (PAT) of ₹86.1 crore, a sharp decline from ₹244.7 crore in Q3FY24
These figures indicate a challenging financial period for IRCON, with declining profitability and margin pressures. However, the company’s recent order win may help improve revenue visibility in the coming quarters.
Order Book and Business Expansion
As of December 31, 2024, IRCON’s total order book stood at ₹21,939 crore, distributed as follows:
- Railway projects: ₹17,075 crore
- Highways: ₹4,775 crore
- Other projects: ₹89 crore
Railway projects remain IRCON’s core business, but the company has been actively diversifying into road, highway, and urban infrastructure projects to reduce dependency on railways.
Strong Domestic and International Presence
IRCON has established itself as a leading turnkey construction company, executing projects across multiple Indian states and expanding operations internationally. It has successfully completed 128 projects in 25 countries and 401 projects across India. The company has a significant footprint in countries such as Malaysia, Nepal, Bangladesh, South Africa, Algeria, Myanmar, and Sri Lanka.
The company’s expertise spans:
- Railway track construction and electrification
- Highway and road development
- Bridges, tunnels, and flyovers
- Urban infrastructure projects
This diversified project portfolio allows IRCON to capitalize on emerging infrastructure opportunities while mitigating risks associated with a slowdown in railway capex.
Future Outlook
IRCON’s latest contract win in Meghalaya signals strong growth opportunities in the urban infrastructure segment. With government-backed projects, a robust order book, and expanding project diversification, the company remains well-positioned for long-term growth.
Investors will closely watch upcoming financial results, project execution timelines, and the government’s budget allocation for railway and infrastructure projects. If IRCON successfully executes its projects on time and improves financial performance, it could regain investor confidence and drive a potential stock price recovery in the future.
