Dilip Buildcon soars 11% on bagging project worth Rs 1,905 cr from NHAI

The project is to be completed in 24 months and its operation period is 15 years from the COD

Shares of Dilip Buildcon zoomed as much as 11.66 per cent to Rs 390 on the BSE on Thursday after the company said it has received a Letter of Acceptance (LOA) from the National Highways Authority of India (NHAI) for a new Hybrid Annuity Model project in Bihar.

"DBL has received letter of acceptance (LOA) for a new HAM project viz "construction and upgradation of NH-131A from km 34,600 near Narenpur to Km 79,97- near Purnea to 4 lane standard and from Km 79,970 to km 82,000 near Purnea to 2 lane with paved Shouders standard in the State of Bihar on (Hybrid Annuity) mode Project," Dilip Buildcon said in an exchange filing today.

The project is valued at Rs 1,905 crore. It is to be completed in 24 months and its operation period is 15 years from the commercial operation date (COD), the company said. 

At 9:45 AM, the stock was trading 6.83 per cent higher at Rs 373.10 as compared to 0.7 per cent gain in the S&P BSE Sensex. Aroun 97,000 shares have changed hands on the NSE and BSE combined, so far.

In the June quarter of 2020-21 (Q1FY21), Dilip Buildcon's net profit declined by 49.67 per cent on a year-on year (YoY) basis to Rs 50.47 crore while consolidated net revenue stood at Rs 2,099.94 crore, down 13.81 per cent YoY.

On the operational front, the company's earnings before interest, tax, depreciation, and ammortisation (Ebitda) stood at Rs 461.12 crore during the quarter while Ebitda margin came in at 21.96 per cent.

After the results announcement, Anand Rathi said that proven execution capabilities and ample revenue assurance hold good for the company but the stock itself had limited potential.

"Dilip’s on-roll workforce meant site mobilisation was quick and the recovery curve for execution efficiency is being further aided by access to owned equipment bank. These and the recent strong order addition raise hopes of a better time, but a surge in net debt proved to be a hitch. This was considered a short-term blip (procedural delays with payments), and efforts are underway to check any expansion in the balance sheet (assets on the block)...We alter our target price from Rs 368 to Rs 369," it said.