Ircon Shares Jump After Bagging Rs 1,000-Crore Order From Meghalaya Government

Shares of Ircon International Ltd. rose nearly 9% on Tuesday after the company won an order worth Rs 1,096 crore from the government of Meghalaya. The order is for the construction of a new secretariat complex in Shillong.

The order, which comprises campus infrastructure on an engineering, procurement and construction basis, is expected to be executed within three years, according to an exchange filing released on Monday. The government of Meghalaya awarded this order as part of a joint venture between Ircon, with a share ratio of 26%, and Badri Rai and Co., with a share ratio of 74%.

Ircon in the quarter ended December recorded a 64.89% fall in consolidated net profit at Rs 86 crore, in comparison to Rs 245 crore reported in the same quarter last year.

Revenue decreased 10.83% year-on-year for the three months ended December, reaching Rs 2,612 crore. Operating income, or earnings before interest, taxes, depreciation, and amortisation, fell 49.05% year-on-year to Rs 131.5 crore. The Ebitda margin contracted by 377 basis points to 5.03% from 8.81% reported in the same period last year.

In addition, the company had announced an interim dividend of Rs 1.65 per share.

Shares of the 'Navratna' public sector enterprise rose as much as 8.85% to Rs 150.40 apiece, the highest level since March 10. They pared gains to trade 7.60% higher at Rs 148.67 apiece, as of 9:27 a.m. This compares to a 0.61% advance in the NSE Nifty 50.

The stock has fallen 31.36% in the last 12 months and 31.80% year-to-date. Relative strength index was at 42.

Out of three analysts tracking the company, one recommends a 'hold' and two suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 2.1%.