Dilip Buildcon rises 4% on Rs 1,947.06 crore-order win

Shares of Dilip Buildcon rose nearly 4 percent on February 20 after the company bagged an order worth Rs 1,947.06 crore. At 9:20 am, shares of the construction and infrastructure company were trading at Rs 211.55, up 1.8 percent on the BSE.

In an announcement, the company stated that they received a letter of acceptance for a project from Madhya Pradesh Jal Nigam Maryadit, Bhopal. The project will be undertaken by Dilip Buildcon Limited-Skyway Infraprojects Pvt Ltd (DBL-SIPL JV).

The completion period of the project is 24 months. It includes engineering, procurement, construction, testing commissioning, trial run, operation and maintenance of various components of Rewa-Bansagar Multi Villages Scheme (MVS), Rewa district, in a single package on a turnkey job basis, including trial run and operation & maintenance of the entire water supply scheme for 10 years.

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Although the company received no orders in the December quarter, it recently secured orders worth Rs 3,300 crore for Q4 FY23. In the last nine months of FY23, the company has already received orders worth Rs 10,100 crore and is targeting an order inflow of Rs 13,000-14,000 crore for the entire year. It has bid for 10-15 projects and expects incremental orders of Rs 3,000-4,000 crore in FY23. The company aims to reach an order book of Rs 30,000 crore by the FY23 end.

Order book is robust but the fluctuation in operating margins will be key, said IDBI Capital Markets & Securities.

Dilip Buildcon has maintained revenue guidance of Rs 10,000 crore for FY23, and the company expects an 8-9 percent YoY revenue increase in Q4, with a 10-15 percent revenue growth forecast for FY24. It revised its operating margin guidance for FY23 to 11 percent from 12 percent, which implies an operating margin of 14 percent for Q4 FY23 based on the revised guidance.

This works out to a 400 basis point improvement in margins between Q3 and Q4.