Dilip Buildcon hits 52-week low, stock slumps 30% in 5 weeks

In the past three months, the stock has declined 43 per cent on weak executions in the July-September quarter (Q2FY22).

Shares of Dilip Buildcon continued to rell under selling pressure, with the stock hitting a fresh 52-week low at Rs 394, down 3 per cent on the BSE in Friday’s intra-day trade. The stock of roads & highways construction company has dipped below its previous low of Rs 403 touched on January 25, 2021.

In the past five weeks, the stock price of Dilip Buildcon has tanked 30 per cent despite the company clarifying that there has not been any ‘raid at the official and residential premises of company.

“In this regard, it is clarified that the team of the investigation agency (Central  Bureau of Investigation) visited the company premises and the residence of the concerned Executive Director at Bhopal on 31-12-2021 and sought some operational and financial information about certain officials and employees of the company,” Dilip Buildcon said on January 2, 2022. CLICK HERE FOR FULL DETAILS.

Further, on January 8, 2022, Dilip Buildcon informed stock exchanges that Executive Director of the company has been released from the custody of the investigating agency passed by the Court of Honble Special Judge, CBI.

The investigation by the agency, the projects of the company are in full swing, and the operations of the company are uninterrupted. It is hopeful that soon the misunderstandings would stand clarified to all concerned, the company said.

However, in the past three months, the stock has been on a declining trend, down 43 per cent on weak executions in the July-September quarter (Q2FY22). In comparison, the S&P BSE Sensex was down marginally by 0.5 per cent. Slow execution in large projects; an extended monsoon; spike in commodity prices, especially bitumen, diesel and steel; and no early completion bonus suppressed EBITDA margin to 10.6 per cent.

High commodity price volatility has led to price escalation coverage reducing to 50-60 per cent in EPC projects and 40 per cent in EPC HAM, while the rest gets realised with annuity payments. Therefore, going forward, margins are likely to be in 14-15 per cent range, analysts at HDFC Securities said in result update.

For the first half (April-September) of the financial year 2021-22 (H1FY22), Dilip Buildcon posted 90 per cent year on year (YoY) decline in net profit to Rs 7.7 crore, as against Rs 81.10 crore in H1FY21. Ebitda margin contracted 401 bps to 11.87 per cent from 15.88 per cent.