Shares of Dilip Buildcon (DBL) fell over 5 percent on May 13 even as the company reported positive earnings for the quarter ended March 2024. The fall in share price comes as IDBI Capital downgraded the stock.
The infrastructure firm reported a consolidated net profit at Rs 5.34 crore in Q4FY24, against a loss of Rs 73.2 crore in the same period of the previous fiscal. The profitability was supported by robust operating numbers, higher other income, and exceptional gain.
Dilip Buildcon's revenue from operations increased by 18.5 percent on-year to Rs 3,365.6 crore for the quarter. According to IDBI Capital, the company could witness flattish revenue growth in FY25 from its current order from H2FY25 book due to election and pick up in ordering.
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Dilip Buildcon's order book of Rs 17,500 crore equals 1.75x TTM revenue. Its debt has been reducing and stood at Rs 1,500 crore as of FY24, down from Rs 2,400 crore in the year before.
The company expects its topline to remain flat YoY in FY25, similar to FY24 with 12-14 percent EBITDA margin. IDBI Capital has downgraded the stock to 'hold' from 'buy' earlier but kept the target price unchanged at Rs 492. The downward revision in rating comes as the stock trades closer to the target, the brokerage said.
DBL 2.0 plan
Dilip Buildcon in its post-earnings call, re-iterated its strategy “DBL 2.0”, wherein their main focus will be to strengthen the balance sheet, become net debt free in the upcoming two years, maintain consistent cash flow, deliver growth (improving ROE, ROCE ), and build client reach in different geographies. Its long-term Alpha Alternative (AA) deal is on track.
According to this deal, AA will invest Rs 2,000 crore over 12-18 months across DBL through 1) the acquisition of a 10 percent stake in DBL through preferential allotment of warrants Rs 530 crore, 2) 26-percent stake in 18 hybrid annuity model (HAM) projects.
DBL received Rs 133 crore from AA against 16.23 crore of convertible warrants issued at Rs 328 per warrant; the balance 75 percent of Rs 399 crore will be done within 18 months of date of allotment (by Jun'25).
The infra company aims to become net debt-free by FY26. This will be led by internal accruals, divestment proceeds, and working capital days reduction, said IDBI Capital in its report.
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At 12:08 pm, Dilip Buildcon shares were trading 4.8 percent lower at Rs 447.60 on the National Stock Exchange (NSE). In the last one year, the stock has more than doubled investors' money, rising around 160 percent. In comparison, the benchmark Nifty 50 gained around 19 percent during this period.
Meanwhile, the company recently informed that the project Construction of Gorakhpur Link Expressway (Package II) from Fulwaria (Dist. Ambedkar Nagar) to Salarapur (Dist. Azamgarh) (Km 47+500 to km 90+535) in the state of Uttar Pradesh on EPC basis has been provisionally completed.
The authority has issued the provisional completion certificate as it declared the project fit for entry into commercial operation as of May 9. 2024.
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