Shares of Ircon International witnessed a 4% increase in its value after the company executed the contract agreement with the Sri Lanka Railways. As per the agreement, Ircon International is responsible for the procurement of design, installation, testing, commissioning, and certifying of the signalling and telecommunication system from Maho Junction to Anuradhapura. The total price of the contract amounts to USD 14.89 million, approximately Rs 122 crore. The work is expected to be completed within 24 months from the signing of the contract.
This development comes after Ircon International reported a significant rise in its consolidated net profit for the first quarter of FY24. The company’s net profit soared by 29.6% YoY, reaching Rs 187.4 crore. In the same quarter of the previous year, the firm had posted a net profit of Rs 144.6 crore on a topline of Rs 2,001.9 crore. Moreover, the infrastructure company witnessed a 35.7% YoY increase in its consolidated revenue from operations, amounting to Rs 2,712.2 crore.
The rise in Ircon International’s stock value has been driven by its strong financial performance and positive investor sentiment. The stock has generated multibagger returns for its investors, with a remarkable increase of over 170% in the past six months and more than 250% in the last year. However, some analysts have projected a downside in the stock’s value, with an average target price of Rs 114, indicating a potential decline of 22% from the current market prices.
Despite the potential downside, market indicators suggest that Ircon International’s stock is currently in a positive position. The stock’s day RSI (14) stands at 61, indicating that it is not yet overbought. Additionally, the stock is trading higher than its moving averages of 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day.
As of 30th June 2023, the shareholding pattern of Ircon International reveals that 73.18% is with the promoter & promoter group, while 26.82% is with the public. The company has a market capitalization of Rs 13,755 crore, classifying it as a mid-cap stock with a PE ratio of 16.32.
In conclusion, Ircon International’s shares experienced a significant increase in value following the execution of a contract agreement with Sri Lanka Railways. The company has also reported impressive financial results, with a surge in its consolidated net profit and revenue for Q1 FY24. Despite projections of a potential decline, the stock has delivered substantial returns to its investors. As the work commences on the signalling and telecommunication system project, stakeholders will closely monitor Ircon International’s performance in the coming months.
