GR Infra fails to hold on to early gains after Rs 3,613-crore orders

The shares of GR Infraprojects surged five percent in the morning trade on February 21 after it announced that it bagged Rs 3,613 crore orders but slipped into the red soon after on likely profit booking.

At 10.06 am, the shares of the infrastructure company were trading 0.7 percent lower at Rs 1,146.25 on the BSE.

The company said it had emerged as the lowest bidder for two tenders invited by National Highways Logistics Management Ltd.

The project worth Rs 1,875 crore-project is for developing, operating and maintaining a ropeway from Gaurikund to Kedarnath in Uttarakhand. It also won a Rs 1,738 crore bid for the development, operation and maintenance of a ropeway from Govind Ghat-Ghangria-Hemkund Sahib in Uttarakhand.

Both projects will operate on hybrid annuity mode (HAM) with a construction period of 1,460 days from the appointed date and operation period will be 15 years from the commercial operation date.

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GR Infraprojects is one of the leading players in the roads and highways sector with an overall order book size of Rs 14,073 crore.

The company has maintained its FY23 order inflow guidance of Rs 15000 crore, despite not winning any project till date in FY23, ICICI Securities said in a February 15 report.

Since most projects in the company’s current order book are HAM, the management expects 8-10 percent revenue growth in FY24, but will give margin guidance once it wins more EPC orders.

However, the existing order book will have 14-15 percent margin. Management expects a YoY revenue growth of 5-10 percent in FY23 with around 15 percent operating margin, the domestic brokerage firm said.

Axis Securities said that the company is looking to diversify into segments such as railways, ropeways, and metros to keep the revenue stream unaffected apart from the road segment.

“With newer opportunities emerging in various infra-related sectors, further diversification strategy augurs well for the company,” the brokerage firm said, pointing out that slower order win is a concern.

For the December quarter, GR Infra reported revenue of Rs 2,191.88 crore, up from Rs 1,955.29 crore in the year-ago period. Consolidated profit after tax rose to Rs 323.65 crore from Rs 145.48 crore in the eyar-ago period.