Shares of ITD Cementation India, one of India’s leading engineering procurement and construction (EPC) players in heavy civil and urban infrastructure and the maritime sector, rallied 14.8% in the early hours of Friday's trade to register a new historic high of ₹249.60 apiece.
This strong rally in shares came in response to the company's significant order win. The company, in a regulatory filing on Thursday, said it secured a marine contract worth approximately ₹3,290 crore.
With nine decades of operations in India, the company boasts a well-established presence and expertise in maritime structures, mass rapid transit systems, airports, hydroelectric power, tunnels, dams, and irrigation, highways, bridges, and flyovers, industrial buildings and structures, Foundation & Specialist Engineering.
On August 09, the company, in a joint venture with Transrail Lighting Limited, secured a contract in Bangladesh for the design, supply, installation, testing, and commissioning of Jamuna river crossing portion of Bogura-Kaliakair 400 kV double circuit transmission line on a turnkey basis (Package-01, Lot-03) from Power Grid Company of Bangladesh Ltd (PGCB) worth US $205 million excluding taxes.
For the June-ending quarter, the company clocked the highest-ever quarterly revenue of ₹1,833 crore, a growth of 67% YoY. The operating profit showed an improvement of 73% YoY to ₹174, while the operating profit margin expanded to 9.5% from 12% in Q1FY23. It posted a 73% YoY increase in net profit to ₹52 crore.
The company secured orders of 247 crore during the quarter, taking its total order book to ₹18,517 crore. In its recent note, domestic brokerage firm Nuvama Professional Clients Group initiated coverage on the stock and set a target price of ₹296 apiece.
According to brokerage, the company's international parentage gives it an edge over peers in terms of access to the latest technologies, know-how, and skilled personnel. Furthermore, the company's widespread presence across India allows it to mitigate risks associated with its business operations.
The company's superior execution capabilities, diversified presence across sectors, and international parentage have aided order inflows. Over the period of FY19 to FY23, the company's order book has shown 20% CAGR growth, while its order inflows have registered a steady 9% CAGR during the same period, the brokerage highlighted.
The brokerage anticipates robust revenue growth in the medium term for ITD Cementation, driven by several factors. These include a strong order book, a solid market position in urban infrastructure and the maritime sector, strong order accretion of ₹158 billion over the past two years, a healthy level of sectoral and geographical diversification, and MNC parentage.
Furthermore, the brokerage anticipates a comfortable working capital cycle and debt coverage in the medium term, along with reduced counterparty risk due to well-funded projects.
In addition, it expects the company return profile to improve, (RoCE of 30%) with an expansion in margin and it estimates a CAGR of 32% in revenue, 47% in EBITDA, and 55% in PAT over FY23 to FY25.
03 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer:The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before taking any investment decisions.
