ITD Cementation surges 18% on Adani play; has zoomed 122% so far in 2024

ITD Cementation had announced on July 3, 2024, that its promoter Italian Thai Development (ITD) Public Company Limited is exploring a potential divestment of its investments in the company.

Shares of ITD Cementation India hit a new high of Rs 634, as they surged 18 per cent on the BSE in Thursday’s intra-day trade amid heavy volumes in an otherwise weak market.

The stock of the civil construction company has surpassed its previous high of Rs 614.30 that it touched on September 23, 2024. In comparison, the BSE Sensex was down 0.90 per cent at 83,512 at 10:00 AM.

The counter saw significant activity on Thursday, with average trading volumes nearly doubling in early trade. A combined 4.97 million equity shares, representing 2.9 per cent of total equity of ITD Cementation, had changed hands on the NSE and BSE together.

In the past two weeks, the stock has rallied 35 per cent, on reports that Adani Group is eyeing to acquire a promoter stake in the company.

On July 3, 2024, ITD Cementation had announced that the company has been informed by Italian Thai Development (ITD) Public Company Limited, the promoter shareholder of the company, that they are exploring a potential divestment of their investments in the company.

The company was also informed that the process is at a preliminary stage and no definitive decision in this regard has been taken as yet, ITD Cementation had said in its exchange filing.

On September 20, ITD Cementation further informed that there was no conclusion to the proposed divestment of ITD’s investments in the company.
 

Meanwhile, thus far in the calendar year 2024, the stock price of ITD Cementation has more than doubled, or zoomed 122 per cent. In comparison, the BSE Sensex has gained 15.4 per cent during this period.

Italian Thai Development Public Company Limited held a 46.64 per cent stake in ITD Cementation at the end of June 2024 quarter, shareholding data on the exchange showed.

ITD Cementation is one of the leading engineering and construction companies undertaking heavy civil, infrastructure and EPC projects in India. The company has expertise in projects such as maritime structures, mass rapid transit systems, airports, hydro-electric power, tunnels, dams and irrigation projects, highways, bridges and flyovers, industrial structures and buildings, foundation and specialist engineering, among others.

For the April to June quarter (Q1FY25), the company had posted robust operational performance with the highest ever quarterly revenue of Rs 2,381 crore (up 30 per cent YoY) and profit after tax at Rs 100 crore (up 91 per cent YoY). Earnings before interest, tax, depreciation and amortisation (Ebitda) grew 36 per cent YoY to Rs 237 crore. In the June 2024 quarter, the company’s consolidated order book stood at Rs 18,536 crore. 

ITD Cementation’s management, in its Q1FY25 earnings call, said the company has secured orders worth around Rs 2,000 crore. Apart from that, the company has secured L1 status for another Rs 2,000 crore worth of orders, and it expects LoI soon.

Members of the management said that they are confident about the company's ability to achieve orders worth another Rs 6,000-Rs 7,000 crore.

Overall, the infrastructure outlook for India looks promising, despite headwinds such as regulatory and policy issues, funding and financing, skilled labour shortages, project execution and quality, sustainability and environment, etc. This optimism is driven by government initiatives, increased private-sector participation and a focus on sustainable and inclusive growth, the management said.

They added that continued momentum in infrastructure development was expected to contribute significantly to India's economic resilience and competitiveness on the global stage.

The management also highlighted the government's significant emphasis on improving connectivity through projects such as Bharatmala Pariyojana for road development, Sagarmala for port-led development and several other initiatives like National Infrastructure Pipeline, National Monetisation Pipeline, among others.

This, they said, demonstrated the government's commitment to fostering growth in the construction sector and enhancing the overall quality of urban and rural life in India.

All these initiatives are directed at attracting investments, improving project execution and creating employment opportunities, ITD Cementation said in its FY24 annual report.