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Business News/ Markets / Stock Markets/  Multibagger Welspun Enterprises stock jumps over 6.5% on 1,864-crore order win

Multibagger Welspun Enterprises stock jumps over 6.5% on ₹1,864-crore order win

Welspun Enterprises shares surged 8.6% during intraday trading, settling with a 6.54% gain. The company secured a major project worth Rs. 1,864.71 crore in Maharashtra. Despite revenue and profit decline in FY24, it exceeded margin guidance, boasting a record order book for FY25.

Welspun Enterprises: Over the last one year, the shares have gained 163% while they have jumped 369% in 2 years. (Pixabay)Premium
Welspun Enterprises: Over the last one year, the shares have gained 163% while they have jumped 369% in 2 years. (Pixabay)

Welspun Enterprises shares surged by 8.6% to 405.50 each during today's intraday trading session, eventually settling with a 6.54% gain at 397.70 per share by the session's close. 

The uptick followed the company's announcement during market hours that it has secured the position of the L1 bidder for the “Construction of Access Controlled Multi-Modal Corridor from Navghar to Balavali in the State of Maharashtra on EPC Mode Package MMC-11.

“The quoted amount for this project is Rs. 1,864.71 crore, and it is scheduled to be completed within a period of 36 months from the date of the notice of commencement," the company said in today's filing. 

Also Read: RBI announces record dividend of 2.11 lakh crore to Government for FY24

During the previous trading session, the stock plummeted by over 5% following the company's announcement of a decline in both revenue and net profit. For Q4 FY24, the company reported a revenue of 644 crore, marking a 22% decrease from the previous quarter's revenue of 824 crore. 

Similarly, its net profit experienced a substantial decline to 64 crore, representing a significant 53% year-on-year decrease.

For the full fiscal year, the company posted an 8% and 51% year-on-year reduction in standalone revenue and net profit, amounting to 2,450 crore and 285 crore, respectively. The company attributed the subdued standalone revenue to challenges with existing projects and delayed order receipts. However, it noted that it had exceeded its margin guidance despite these challenges.

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On the positive front, the company commenced FY25 with its highest-ever standalone opening order book valued at 12,200 crore. This order book is primarily composed of water and wastewater management projects, constituting 77%, and road projects, constituting 23%, as per the company's Q4 earnings report. 

When factoring in the subsidiary Welspun Michigan Engineers' order book worth 1,600 crores, the company's consolidated order book totals to a significant 14,200 crore. This consolidated order book is over 4 times the company's consolidated revenue for FY24.

Also Read: Five solid small caps at 52-week lows. Time to take a close look?

Looking ahead, the road sector presents attractive opportunities as the government aims to construct 23 new national highways by 2025, with the private sector projected to emerge as the primary contributor to road infrastructure development. The expansion of national highways is set to reach 16,000 km in 2023–24, advancing at a pace of 45 km per day.

Concurrently, the government aims to provide piped water supply to households in rural areas, targeting a capital expenditure of 12.6 trillion rupees for building water infrastructure.

Also Read: Mazagon Dock: This defence PSU stock is trading 1900% above its IPO price

Welspun Enterprises Ltd. (WEL), part of Welspun World, is an infrastructure development company focusing on road, water, and wastewater segments. The company also has investments in oil & gas exploration. 

Over the last one year, the shares have gained 163% while they have jumped 369% in 2 years. 


Disclaimer: We advise investors to check with certified experts before taking any investment decisions.

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Published: 22 May 2024, 04:37 PM IST
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