Ircon International Shares Jump 2.5% After Securing ₹872 Crore Order from RVNL
Stock Rises on New Order Win
Shares of Ircon International Limited, a leading public sector enterprise under the Ministry of Railways, surged 2.5% on the BSE during Friday’s trading session. This positive momentum came after the company, in a joint venture (JV) with SSNR Projects Private Limited, secured a ₹872.7 crore project from Rail Vikas Nigam Limited (RVNL).
With this development, Ircon’s stock hit an intraday high of ₹163.7, compared to its previous closing price of ₹159.75. The stock has been a mixed performer, delivering negative 29% returns over the past year but gaining nearly 10% in the last month.
Details of the New Order
The latest Letter of Award (LOA) from RVNL involves constructing two tunnels—T1 (Chainage Km 33+160 to Km 34+400) and T2 (Chainage Km 57+400 to Km 66+040)—alongside ballastless track installation and formation-related works at the tunnel approaches.
The project is a crucial part of the electrified broad-gauge railway line between Mangliyagaon (Indore) and Budni stations (198 km), spanning across the Ratlam and Bhopal divisions of Western and West Central Railway in Madhya Pradesh.
The Ircon-SSNR JV has a shareholding of 70% (Ircon) and 30% (SSNR), making Ircon’s direct share in the order worth approximately ₹610.8 crore. The project is expected to be completed within 40 months, followed by a 6-month defect liability period (DLP).
Ircon’s Expanding Order Book
As of December 2024, Ircon International’s total order book stood at a massive ₹21,939 crore, with:
- 78% from Railway projects (₹17,075 crore)
- 22% from Highways (₹4,775 crore)
- ₹89 crore from other segments
This new order strengthens Ircon’s leadership in executing complex infrastructure projects, reinforcing its long-term growth trajectory.
Financial Performance: Growth & Challenges
While Ircon’s historical performance has been impressive, its recent quarterly earnings saw a decline.
Q3 FY25 Performance vs. Q3 FY24
| Financial Metric | Q3 FY25 | Q3 FY24 | Change (%) |
|---|---|---|---|
| Revenue from Operations | ₹2,613 Cr | ₹2,930 Cr | -11% |
| Net Profit | ₹86 Cr | ₹245 Cr | -65% |
Despite the short-term downturn, The company’s revenue from operations has grown at a CAGR of 32% from FY21 to FY24, while net profit surged at 33% CAGR over the same period.
Company Overview: A Legacy of Engineering Excellence
Established in 1976, Ircon International started as a railway construction company but has since evolved into an integrated infrastructure powerhouse, specializing in railways, highways, and complex civil engineering projects.
With strong backing from the Government of India, Ircon remains a key player in nation-building initiatives, executing critical infrastructure projects domestically and globally.
Key Financial Ratios & Market Metrics
For investors evaluating Ircon International, here are some key financial ratios:
| Metric | Value | Metric | Value |
|---|---|---|---|
| Market Cap | ₹14,721 Cr | Stock P/E | 19.3 |
| Current Price | ₹156 | Book Value | ₹65.7 |
| Dividend Yield | 1.98% | ROCE | 18.2% |
| ROE | 16.4% | Face Value | ₹2.00 |
| Promoter Holding | 65.2% | P/B Ratio | 2.38 |
| Debt-to-Equity | 0.55 | EPS | ₹8.12 |
| Intrinsic Value | ₹166 | Graham Number | ₹110 |
| Industry PE | 19.4 | PEG Ratio | 1.24 |
| DMA 200 | ₹201 | RSI | 48.1 |
| Free Cash Flow (3Yrs) | ₹111 Cr | Debt | ₹3,385 Cr |
The debt-to-equity ratio of 0.55 indicates a moderate leverage position, and with promoter holding at 65.2%, there is strong institutional confidence in the company.
Investor Outlook: What’s Next for Ircon?
With a strong order book, expanding projects, and a government-backed business model, Ircon remains a long-term growth candidate. However, recent revenue declines and profit pressures signal near-term challenges.
For investors, key factors to watch include:
- Execution of the new ₹872 crore project—timely completion will be crucial.
- Revenue rebound in the coming quarters.
- Stock movement—whether it can sustain above ₹160 levels and reclaim its 200 DMA of ₹201.
- Future order inflows from Railways, Highways, and International projects.
Q&A: Quick Insights for Readers
1. Why did the company’s stock rise today?
Ircon’s stock jumped 2.5% after securing a ₹872 crore order from RVNL for a railway tunnel and track construction project in Madhya Pradesh.
2. What is the scope of the company’s new project?
The project involves constructing two tunnels (T1 & T2), installing ballastless tracks, and formation works for the Mangliyagaon-Budni railway line.
3. How much of the order value will the company handle?
Ircon holds 70% stake in the Ircon-SSNR JV, meaning its share of the ₹872 crore order is ₹610.8 crore.
4. What is the company’s total order book value?
As of December 2024, Ircon’s order book stands at ₹21,939 crore, with 78% from Railways and 22% from Highways.
5. How has the company’s stock performed in the past year?
Ircon’s stock has declined 29% over the past year but gained 10% in the last month, showing recent positive momentum.
6. Is the company a good stock for long-term investment?
With a strong order book, government backing, and expertise in infrastructure, Ircon has long-term growth potential, though recent earnings declines require cautious monitoring.
Final Thoughts
Ircon International’s latest contract win strengthens its position in the railway infrastructure sector. While short-term financial performance has faced some setbacks, the company’s expanding order book and strategic government-backed projects keep it in the spotlight for investors.
With a stock price near ₹156 and an intrinsic value of ₹166, investors will closely watch whether the company can regain momentum in the upcoming quarters.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.