RPP Infra’s Big Order Win from Railways; Stock Hits Upper Circuit

On Tuesday, the broader markets outperformed the frontline indices, with the Nifty Small-cap gaining 1.23% and the Nifty Mid-cap adding over 1%. The market sentiment was upbeat, as indicated by the healthy market breadth: 1,324 stocks advanced, while 779 stocks declined. Amidst this buoyancy, one stock stood out by hitting its upper circuit limit of 5%—RPP Infra Projects Ltd. Let’s explore what makes this construction company an interesting play in the current market environment.

About RPP Infra Projects Ltd

RPP Infra Projects Limited (RPPIPL) is no newcomer to the construction industry. Established in 1988 as R.P.P Builders, it was reconstituted as a limited company in 1995. With its registered office in Erode, Tamil Nadu, RPPIPL operates across multiple segments, including power, irrigation and water supply, industrial structures, roads, and buildings. A key strength of the company is its focus on small government projects with short- to medium-term durations, providing consistent revenue visibility.

Big Order from the Railway Sector

One reason for the stock’s recent rally could be its latest order. RPP Infra Projects Ltd, in partnership with M/s V. Sathyamoorthy & Co. under the JV name “RPP-SATHYAMOORTHY JV,” has received a letter of acceptance for a new project. This involves major upgradation of the Raipur Railway Station of South East Central Railway (SECR) on an Engineering, Procurement, and Construction (EPC) model, valued at Rs 412.81 crore. The company’s existing work order book, which stood at Rs 3,256.68 crore as of April 23, 2024.

Stock Performance and Valuation

RPP Infra Projects has been on a remarkable run. Over the past 12 months, the stock has surged 193%, and in the last month alone, it has delivered a 13.12% return. Despite these impressive gains, the stock still trades at a price-to-earnings (PE) ratio of 7.72x, which is considerably lower than the industry average PE of 19.1x. This discrepancy suggests that there could be more room for growth.

As the broader markets continue to rally, keep an eye on RPP Infra Projects Ltd in the coming trading sessions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.