Infra stock jumps 4% after securing road development project worth ₹58 Cr

Synopsis: AVP Infracon jumped sharply after the company secured a significant contract worth Rs 57.57 Crore.

The shares of this construction player building a diverse range of infrastructure projects since 2009 are in focus after the company secured a significant contract in its favor. In this article, we will dive more into the details of it.

With a market capitalization of Rs 402 crore, the shares of AVP Infracon Ltd reached a day’s high of Rs 164.95 per share, up 4 percent from its day’s low price of Rs 158.50 per share. In the last one year, the stock has delivered a poor return of only 14 percent, however, outperforming NIFTY 50’s return of 6.5 percent.

About the Order

AVP​‍​‌‍​‍‌​‍​‌‍​‍‌ Infracon, through a stock exchange filing, announced that it has been recognized as the L1 bidder for a road development project that has been awarded by the Superintending Engineer, Highways C and M, Thiruvannamalai. 

The main scope of the work includes the widening of Thiruvannamalai–Thiyagadurgam Road (SH-9A) from two lanes to four lanes and the strengthening of the existing road from Km 39/6 to 51/040. Apart from this, a center median, retaining wall, junction improvements, and the reconstruction and widening of culverts and minor bridges are also part of the road project.

The total value of the contract is close to Rs 57.57 crore, and the project duration has been fixed for 12 months. This is another significant achievement milestone for AVP Infracon in its journey to dominate the road infrastructure segment and is indicative of the company’s sustained success in winning crucial government ​‍​‌‍​‍‌​‍​‌‍​‍‌contracts.

As of the latest filings available, the company has a robust unexecuted order book of Rs 400 crore (1.5x of FY25 Sales), and it aims to achieve a total order book of Rs 700-800 crore by the end of this financial year.

Financial Highlights

AVP Infracon delivered a revenue of Rs 184 crore in H2 FY25, a growth of 96 percent as compared to Rs 94 crore in H2 FY24. Regarding its profitability, the company reported a net profit growth of 82 percent to Rs 20 crore in H2 FY25 as compared to Rs 11 crore in H2 FY24.

The stock delivered an excellent ROE and ROCE of 30.07 percent and 25.33 percent respectively, and is currently trading at a low P/E of 12.36x as compared to its industry P/E of 22.17x.

AVP​‍​‌‍​‍‌​‍​‌‍​‍‌ Infracon Limited is a Tamil Nadu-based construction company that has been building a diverse range of infrastructure projects since 2009. Its main focus is on roads, highways, flyovers, bridges, and irrigation projects under BOQ and EPC models. Besides, the company has rebranded itself from AVP Constructions Private Limited to AVP Infracon Limited and has extended its services to urban development. 

So now they also construct hospitals, warehouses, hotels, and residential or commercial buildings. Most of the company’s works are spread throughout Tamil Nadu, where it is actively engaging in government and infrastructure contracts by submitting its ​‍​‌‍​‍‌​‍​‌‍​‍‌bids.

Written by Satyajeet Mukherjee

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