Ashoka Buildcon share price

Ashoka Buildcon Shares Surge After Securing Major Infrastructure Projects Worth Rs 2,310 Crore

Ashoka Buildcon Ltd, one of India’s leading highway developers, saw its shares surge by up to 8% after the company bagged three massive projects from the Maharashtra State Road Development Corporation Ltd (MSRDC) worth Rs 2,310 crore. The company’s stock price jumped to Rs 264.10 per share, marking a 5.44% increase from its previous close of Rs 251.80. This bullish movement has pushed Ashoka Buildcon’s market capitalization to an impressive Rs 7,453.20 crore.

What’s Behind the Rally?

The rally was fueled by Ashoka Buildcon’s receipt of three significant Letters of Acceptance from the MSRDC for the construction of major bridges across various regions in Maharashtra. The total value of these projects stands at Rs 2,310 crore, with a completion deadline of 36 months, including monsoon delays. This substantial win has significantly boosted investor confidence, triggering a positive uptick in the company’s stock performance.

Stellar Financial Performance

Ashoka Buildcon has posted remarkable financial growth over the past year. Revenue jumped by an impressive 27%, soaring from Rs 1,935 crore in Q1FY24 to Rs 2,465 crore in Q1FY25. Ashoka Buildcon share price, Even more striking is the 119% surge in net profit, which skyrocketed from Rs 72 crore to Rs 158 crore in the same period.

Such a solid financial foundation demonstrates the company’s ability to execute large-scale projects efficiently while maintaining profitability.

Robust Order Book and Recent Wins

As of June 30, 2024, Ashoka Buildcon boasts a healthy order book valued at Rs 10,356 crore. The company has established a strong presence across India, completing 14,000 km of roadways and electrifying over 30,000 villages through its Power Transmission & Distribution (T&D) projects. Its prominent clients include NHAI, Rail Vikas Nigam Ltd, and Ircon International Ltd.

Recently, Ashoka Buildcon achieved completion certificates for two Hybrid Annuity Mode (HAM) projects with the National Highways Authority of India (NHAI). Additionally, the company emerged as the lowest bidder for four EPC projects in Maharashtra and Mumbai, while also signing a new EPC agreement for a water supply project in the Ivory Coast.

Detailed Order Book Breakdown

Ashoka Buildcon’s order book is well-diversified, ensuring a steady stream of revenue across multiple sectors. The breakdown is as follows:

Roads and Railways: Rs 5,316 crore (52%)
Power Transmission & Distribution (T&D): Rs 4,424 crore (42%)
EPC Building Segment: Rs 617 crore (6%)

This balanced portfolio highlights the company’s strategic focus on key infrastructure areas, ensuring long-term sustainability and growth.

Margin Growth and Future Projections

Currently, Ashoka Buildcon’s EBITDA margins range from 7% to 8%. However, the company expects these margins to rise to 9% to 10% in Q3 and Q4 of FY25, supported by better cost controls and higher execution rates. For the full year, margins are projected to stabilize between 8% and 10%, with a potential return to historical levels of 10% to 12% by FY26.

Promising Outlook for FY25

Looking ahead, Ashoka Buildcon anticipates revenue growth of 15-20% for FY25. Additionally, the company expects new order inflows worth Rs 10,000 to Rs 12,000 crore, driven by its focus on expanding its EPC business across highways, railways, and power transmission and distribution segments. This robust pipeline positions the company for continued success in the coming years.

Outstanding Returns

Investors have seen excellent returns from Ashoka Buildcon stock, with the company delivering a remarkable 42.25% return over the past six months and an impressive 93.61% return over the last year. Such strong performance is a testament to the company’s consistent execution and growth strategy.

Government Initiatives and Opportunities

Ashoka Buildcon is well-positioned to benefit from various government initiatives aimed at boosting infrastructure development in India. The NHAI has announced plans to bid out 15 road projects worth Rs 44,000 crore under the BOT model in FY25. Additionally, the government has revised the Model Concession Agreement to attract more developers, and plans to monetize Rs 2.4 billion worth of projects via InvIT to reduce debt. These initiatives present a wealth of opportunities for Ashoka Buildcon to further expand its footprint in the infrastructure sector.

Company Profile

Ashoka Buildcon Ltd is a prominent player in the construction of roads and highways, while also engaging in the maintenance and operation of toll roads. Beyond roadways, the company has diversified its business into other infrastructure segments, including buildings, power transmission, railways, and city gas distribution, reinforcing its reputation as a well-rounded infrastructure developer.

Conclusion:

Ashoka Buildcon is riding high on a wave of positive momentum, thanks to its recent project wins and stellar financial performance. Ashoka Buildcon share price, The company’s diversified order book, strong margins, and promising outlook for FY25 suggest that it is well-positioned to capitalize on future growth opportunities. With significant government infrastructure initiatives on the horizon, Ashoka Buildcon’s focus on highways, railways, and power transmission could drive further success and enhance shareholder value.