Small-Cap Stock Reaches New Heights After Landing Major DRDO Order
Shares of Afcons Infrastructure Ltd soared over 6% to make a new high of Rs 570 on January 3, 2025, driven by a significant DRDO contract. Get detailed insights and investment guidance with Liquide
Stocks in News | Afcons Infrastructure Ltd, a prominent entity within the Shapoorji Pallonji Group, saw its shares scale to a new high after securing a significant government contract from the Defence Research and Development Organisation (DRDO) under the Ministry of Defence, India. The shares soared by 6.6% in intraday trading to peak at Rs 570 on Friday, January 3, settling later at Rs 543.25.
Details of the DRDO Order
The awarded DRDO contract, worth Rs 1,085 crore, is part of an initiative to enhance the Maritime Theatre Command (MTC) and includes the development of workshop facilities for a shiplift in Visakhapatnam.
Afcons Infrastructure will be responsible for the complete design and construction, encompassing civil, mechanical, electrical, HVAC (Heating, Ventilation, Air Conditioning), and ELV (Extra Low Voltage) systems, and will also manage the furnishing of interiors. The project is slated for completion within the next 36 months. For more details, read the exchange filing here.
Performance and Projections
Afcons Infrastructure has already bagged orders worth Rs 19,000 crore as of September 2024, potentially surpassing the projected annual target of Rs 20,000 crore with expected additional orders of around Rs 5,000 crore by year-end.
As of September 2024, the company's total order book stands at Rs 34,152 crore, offering significant growth visibility for the medium term.
About Afcons Infrastructure Ltd
With over six decades of expertise, Afcons Infrastructure stands out as a flagship engineering and construction firm under the Shapoorji Pallonji Group. The company has delivered numerous technologically complex engineering, procurement, and construction (EPC) projects across India and globally. It ranks among the Top 120 international contractors, placing 10th in Marine & Ports and 12th in Bridges, according to the latest ENR survey.
Market Debut: Afcons Infrastructure made its stock market debut on November 4, 2024, at Rs 426 per share, marking an 8% drop from the issue price of Rs 463. The stock is now up 27% from its listing price.
Financial Performance Highlights
- Consistent Growth: Afcons Infrastructure has demonstrated solid growth, evidenced by impressive CAGRs in operational revenue (10%), EBITDA (22%), and net profit (12%) from FY22 to FY24.
- Healthy Return Ratios: Afcons Infrastructure showcases strong financial health, with a Return on Equity of 13% and a Return on Capital Employed (RoCE) of 20% in FY24, placing it among the industry leaders.
- Increasing Profitability: In recent years, Afcons Infrastructure has notably improved its EBITDA and Net Profit margins, which stood at 11.60% and 3.30% respectively as of March 31, 2024.
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