Stock Market Today: Ashoka Buildcon, Dilip Buildcon Ltd , KNR Constructions Ltd, GPT Infraprojects , H.G. Infra Engineering Ltd PNC Infratech Ltd and IRB Infrastructure Developers LTD share prices remains in focus as order inflows that were subdued in first quarter FY25 due to general elections are catching pace.
Ashoka Buildcon, Dilip Buildcon Ltd , KNR Constructions Ltd, GPT Infraprojects , H.G. Infra Engineering Ltd share prices among others have risen up to 8% in last Month. IRB Infrastructure Developers LTD share prices however are exceptions having corrected in last one month. However the IRB have already gained significantly in last one year with IRB having almost double, and hence some correction is taking place.
Analysts say that order inflow improvement has been visible in last few months
Road construction Order inflows improve
Mr. Vinay Kumar G, Vice President & Sector Head – Corporate Ratings, ICRA Limited, said that the awarding activity gained traction sequentially, with 589 km awarded in August 2024 ( up 27% month on month over July 2024).
However, overall awarding activity remains lower by 7% as compared to August 2023.
Also during first five months of FY2025, the road awards stood at 1152 km, 34% lower than the 1756 km awarded in 5M FY2024.
ICRA estimates road awards by the Ministry of Road Transport and Highways (MoRTH) at 8,500-9,000 km in FY2025, similar to last year’s awarding of 8,581 km. With improved clarity regarding order-awarding activity from the MORTH in August 2024, project awarding is expected to gain momentum from September 2024 onwards. However, the overall project award will remain substantially lower than that of FY2021-FY2023 levels, added the rating agency
Analysts at Nuvama Road awarding was subdued in Q1FY25 due to general elections, however, it has picked up since then with NHAI and MoRTH combined awarding 468km projects in July-24 (91km in Jun-24 and 514km in Jul23). Construction at the combined level stood at 600km during the month (646km in Jun-24 and 420km in Jul-23)
The competition however remains high too and there are some concerns on margins of the firms. Given the backdrop, Nuvama analysts say that road developers must work on segmental diversification since their ability to win adequate road orders at desired margins is now under question. Nuvama analysts prefer road companies with robust balance sheets such as PNC Infratech
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