Shares of Ashoka Buildcon Ltd. experienced a significant rally, jumping nearly 14% in early trading Wednesday. This surge followed the company's announcement of securing a substantial project from the National Highways Authority of India (NHAI), valued at Rs 865.90 crore (excluding GST).
The infrastructure developer confirmed receiving a Letter of Acceptance (LoA) for the Engineering, Procurement, and Construction (EPC) contract. This project is critical for completing the remaining work on an eight-lane, access-controlled expressway. Specifically, it covers the 26.6-kilometer stretch from Karvad to Jujuwa (Km 128.0 to Km 154.6) within the Vadodara-Mumbai Expressway in Gujarat. The project is slated for an 18-month completion timeline.
Stock Performance and Q2 Financials
Following the news, Ashoka Buildcon's shares hit an early high of Rs 117.36, representing a 13.94% increase. Later in the day, the stock was trading approximately 10.59% higher at Rs 113.91. Despite this recent boost, the company's stock remains down over 32% year-to-date.
On the financial front, Ashoka Buildcon reported a 4% year-on-year (YoY) increase in revenue for the September quarter of FY27. However, its EBITDA margin saw a contraction of around 265 basis points YoY, settling at 7.1%, as noted by Nuvama Institutional Equities. The brokerage also highlighted a strong performance in adjusted profit after tax (PAT), which rose 40% YoY and 20% sequentially to Rs 38 crore.
Segment Contributions and Future Outlook
The road segment continues to be the primary revenue driver for Ashoka Buildcon, contributing approximately 60% of the company's total revenue. Power transmission and distribution (T&D) and railway segments accounted for 23% and 14%, respectively.
Looking ahead, Ashoka Buildcon anticipates concluding the sale of four hybrid annuity model (HAM) projects by the end of Q3 FY27. The company expects the sale of the remaining two HAM assets to be completed by the close of Q4 FY27 or early Q1 FY28, which could further streamline its operations and financial position.