Railway stock in focus after receiving LoA worth ₹225 Cr from North East Frontier Railways

Synopsis:
Ircon International Limited secured a Rs. 224.50 crore contract from North East Frontier Railways for civil, electrical, mechanical, and signal works to upgrade railway infrastructure over 18 months.

This Small-cap Navratna Stock, engaged in turnkey construction of railways, highways, electrification, signalling, and telecom, along with infrastructure development in challenging terrains internationally, is in focus after receiving a LoA worth Rs. 224.50 crore from North East Frontier Railways.

With a market capitalization of Rs. 15,960.55 crore, the shares of Ircon International Limited were currently trading at Rs. 169.70 per equity share, down nearly 1.91 percent from its previous day’s close price of Rs. 173. 

What is the news?

Ircon International Limited has received a Letter of Acceptance from North East Frontier Railways for a major composite project involving civil, electrical, mechanical, and signal & telecom works. The project includes upgrading maintenance infrastructure for the Vande Bharat Express at NJP, constructing a GE loco shed at SGUJ for 250 GE locos, and developing next-generation freight maintenance facilities at New Jalpaiguri in Katihar.

The Rs. 224.50 crore contract is domestic and will be executed over 18 months. This award strengthens Ircon’s order book, highlights its expertise in large-scale railway projects, and supports India’s energy-efficient and modern railway initiatives.

Order Book

As of June 30, 2025, Ircon International Limited reported an order book valued at Rs. 20,973 crore. The sector-wise distribution shows that railways account for the largest portion, comprising 75 percent (Rs. 15,724 crore) of the total order book, followed by highways at 20 percent (Rs. 4,234 crore) and other segments contributing 2 percent (Rs. 1,015 crore). 

In terms of geography, 90 percent (Rs. 18,793 crore) of the orders are domestic, while the remaining 10 percent (Rs. 2,180 crore) are international. This mix highlights Ircon’s strong market positioning in railway infrastructure.

Company Overview

Ircon International Limited was established in 1976 and is also known as Indian Railway Construction International Limited (IRCON), a government-owned engineering and construction corporation under the Ministry of Railways, India. 

The company specializes in transport infrastructure projects, particularly railway construction, electrification, signaling, and telecommunications, along with highways and electrical substation engineering.

Ircon International Limited has completed 405 domestic and 130 international projects, executing 5,564 TKM of railway track, 9,654 RKM of railway electrification, 6,807 km of roads and highways, 157 km of tunnels, 1.56 million sqm of buildings, and 159 bridges. Ircon is recognised for its expertise in large-scale, complex infrastructure projects.

Recent quarter results

Coming into financial highlights, Ircon International Limited’s revenue has decreased from Rs. 2,287 crore in Q1 FY25 to Rs. 1,786 crore in Q1 FY26, which is a drop of 21.91 percent. The net profit has also decreased by 26.79 percent from Rs. 224 crore in Q1 FY25 to Rs. 164 crore in Q1 FY26.

Ircon International Limited’s revenue and net profit have grown at a CAGR of 14.82 percent and 8.46 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 11.6 percent and 11.3 percent, respectively. Ircon International Limited has an earnings per share (EPS) of Rs. 7.73, and its debt-to-equity ratio is 0.68x.

Written By – Nikhil Naik

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