BackIrcon share price gains over 2% after deal with Sri Lanka Railways; Antique Broking rates ‘Buy’; sees 24% upside
Brokerage firm Antique Stock Broking has initiated coverage on Ircon International with a ‘Buy’ rating and a target price of ₹176 per share, implying an upside of over 24% from Friday’s closing price.
PremiumIrcon International share price gained over 2% on Monday after the company executed the contract agreement with Sri Lanka Railways. Ircon shares gained as much as 2.12% to ₹144.45 apiece on the BSE.
The work includes procurement of Design, Installation, Testing, Commissioning and Certifying of Signalling and Telecommunication system from Maho Junction (Including) to Anuradhapura (Excluding) under Indian Line of Credit at a total price of $14.89 million equivalent to approximately ₹122 crore.
The work will be completed by Ircon International within 24 months from the date of signing of contract, the company said in a regulatory filing.
Meanwhile, as on June 30, Ircon’s order book stood at ₹324 billion — with 73% exposure to the railways.
In other segments like metros, roads, and other spheres of infrastructure, Ircon has weighed its presence.
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Brokerage firm Antique Stock Broking has initiated coverage on Ircon International with a ‘Buy’ rating and a target price of ₹176 per share, implying an upside of over 24% from Friday’s closing price.
The brokerage firm noted that the bulk of the company’s revenue is dependent on EPC services, qualifying for the term asset-light, implying high RoE.
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“However, IRCON’s seemingly low RoE is due to non-core elements ranging from (a) Own cash of ₹9 billion, (b) Investments of ₹22 billion, and (c) Additional investment plan of ₹12 billion," Antique Stock Broking said.
Ircon also wishes to foray aggressively into high-speed rail, semi-high speed, solar, and road projects while aiming for ₹100–120 billion
The brokerage foresees a 10% CAGR in revenue and net profit over the next three years. It assigned 1x for investments in books.
However, competitive intensity and linear infrastructure delays can cap the growth limit. Key risks include big ticket projects with competitive margins and poor capital allocation.
At 10:25 am, Ircon International share price was trading 0.67% higher at ₹142.40 apiece on the BSE.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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