IRCON Share Price Gains Over 3% After Winning Major Hydro Project Contract

Shares of IRCON International Ltd, a public sector company involved in railway construction, jumped as much as 3.24% on Monday, reaching ₹157.95 apiece in the trading session. The reason behind the surge is that IRCON has received a LoA (Letter of Acceptance) from North Eastern Electric Power Corporation Limited (NEEPCO) for a civil works contract worth ₹458.14 crore.

The civil contract is for the Tato-I Hydro Electric Project located in Arunachal Pradesh.

Details of the Tato-I Hydro Electric Project

In an exchange filing dated May 2, IRCON announced that it had been awarded the Package-I civil works contract by North Eastern Electric Power Corporation Limited (NEEPCO) for the Tato-I Hydro Electric Project in Arunachal Pradesh. The scope of work includes construction on an item-rate basis and covers headworks and related structures, head race channel and pipe, intake, headrace tunnel, surge shaft, pressure shaft, valve house, powerhouse, and other supporting infrastructure.

The Package-I contract includes the execution of civil works on an item rate basis, which means payment will be made based on the actual quantity of work done. The scope of the project covers a wide range of critical components, such as:

• Headworks and related structures

• Head race channel and pipe

• Intake system

• Headrace tunnel

• Surge shaft and pressure shaft

• Valve house and powerhouse

• Other associated infrastructure

The entire project is planned to be completed within 45 months from the date of commencement.

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Additional Orders Secured by IRCON

Order from North-Western Railway in April

In early April, IRCON had also announced the receipt of another major order worth ₹127.80 crore from the S&T (Construction) division of the North-Western Railway. This particular order involves:

• Design, manufacturing, supply, installation, testing, and commissioning

• Of a microprocessor-based Electronic Interlocking (EI) system

• Including an integrated Block Instrument

• At 20 stations in the Ajmer Division

This railway project is expected to be completed in 24 months.

Joint Venture Win in March

In March 2024, IRCON International, through a joint venture (JV) with SSNR Projects Private Limited (IRCON-SSNR JV), secured a significant railway infrastructure contract from Rail Vikas Nigam Ltd (RVNL).

Although detailed figures of the March contract were not shared in this update, this deal further strengthens IRCON’s presence in the Indian railway development sector.

About Ircon International

Ircon International, also known as Indian Railway Construction International Limited, is a government-owned engineering and construction company in India that focuses on transport infrastructure. It was founded in 1976 by Indian Railways and operates under the Indian Companies Act of 1956.

As of 11:48 AM IST on May 5, Ircon International share price was trading at ₹157.81, up ₹4.71 or 3.08% for the day. The stock opened and hit an intraday high of ₹160.99, with a low of ₹157.00. The company has a market capitalisation of ₹14,820 crore, a price-to-earnings (P/E) ratio of 19.45, and offers a dividend yield of 1.87%. Over the past 52 weeks, the stock has touched a high of ₹351.60 and a low of ₹134.24.

Conclusion

IRCON’s recent order wins reflect the company’s strong project execution capabilities and its growing footprint in both railway and hydroelectric infrastructure projects. The ₹458 crore order for the Tato-I Hydro Electric Project is expected to contribute significantly to the company’s revenues in the coming quarters. This positive development has boosted investor confidence, as seen in the stock’s strong performance in Monday’s trading session.

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