Ashoka Buildcon, a leading infrastructure construction and development company in India, has received a boost in its share price after announcing that it has secured orders worth Rs 645.70 crore from Maharashtra State Electricity Distribution Company (MSEDCL).
What is the orders for Ashoka Buildcon from MSEDCL?
The orders are for the development of distribution infrastructure under the revamped distribution sector scheme for loss reduction works. The scheme aims to improve the quality and reliability of power supply in rural and urban areas by reducing technical and commercial losses.
The orders are for the works to be carried out in four circles of MSEDCL, namely Yavatmal, Nashik Urban, Latur and Osmanabad. The works include installation of new transformers, meters, cables, poles, and other equipment, as well as renovation and augmentation of existing infrastructure.
How did the market react?
The market reacted positively to the news of the order-win by Ashoka Buildcon. The share price of the company rose by 0.47 percent to Rs 106.10 apiece on the NSE at 10.30 am on September 20th. The stock has gained over 20 percent in the last one month and over 50 percent in the last one year.
The order-win is expected to boost the revenue and profitability of Ashoka Buildcon in the coming quarters. The company reported a revenue of Rs 1,935 crore in the first quarter of FY2023-24, up by 2.98 percent year-on-year (YoY). The net profit for the quarter was Rs 72 crore, down by 46.66 percent YoY. The operating profit margin for the quarter was 24 percent, down by 200 basis points YoY.
About Ashoka Buildcon
Ashoka Buildcon Ltd is a leading company in the infrastructure construction and development sector in India. The company started as a civil construction firm in 1983 and later diversified into various segments such as roads, highways, bridges, tunnels, power transmission and distribution, railways, urban development, and irrigation. The company has expertise in executing projects on a build-operate-transfer (BOT) basis, as well as undertaking engineering, procurement and construction (EPC) work.
The company also manufactures ready-mix concrete (RMC), bitumen, and pre-cast concrete poles for its own use and for sale to third parties. The company has a presence in 18 states across India and has a strong order book of over Rs 12,000 crore.
The company has a portfolio of over 40 projects across 18 states, spanning over 7,000 km of roads, highways, bridges, and tunnels. The company also has interests in power transmission and distribution, railways, urban development, and irrigation.
The company has a strong track record of timely execution and quality delivery of projects. The company has also diversified its revenue streams by entering into hybrid annuity model (HAM) and toll-operate-transfer (TOT) projects, which offer higher returns and lower risks.
What is the outlook for Ashoka Buildcon?
Ashoka Buildcon is well-positioned to benefit from the government’s focus on infrastructure development and spending. The company has a robust order book of over Rs 12,000 crore, which provides revenue visibility for the next three to four years. The company is also actively bidding for new projects in various segments and geographies.
The company has a healthy balance sheet with low debt and high cash flow generation. The company has also improved its operational efficiency and cost management in recent years. The company is expected to deliver steady growth in revenue and earnings in the medium to long term.
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