Shares of Puravankara Ltd., a prominent real estate developer, saw a notable increase of almost 5% on Friday after its wholly-owned subsidiary, Starworth Infrastructure & Construction Ltd. (SICL), announced a major new contract. The subsidiary received a Letter of Intent (LOI) from Red Connect Private Ltd. for civil and structural works related to the construction of a Ritz-Carlton project in Chennai's MRC Nagar.
The contract, valued at Rs 175 crore, marks a significant win for Puravankara and is projected to be executed over a period of 32 months. This development contributed to Puravankara's stock reaching Rs 227 during intraday trading, up from its previous close of Rs 216.50, before settling at Rs 218.90, an increase of 1.11%.
Strong Q1 Performance Bolsters Confidence
The new order win follows a strong financial performance by Puravankara in the June quarter (Q1 FY27), where the company returned to profitability on a consolidated basis. The developer reported a consolidated net profit of Rs 25.23 crore, a significant turnaround from a net loss of Rs 68.55 crore in the same period last year. This improvement was largely driven by robust revenue growth and enhanced operating profitability.
- Revenue Growth: Operations revenue surged by 61.8% year-on-year, reaching Rs 848.72 crore compared to Rs 524.40 crore in Q1 FY26.
- EBITDA Expansion: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose to Rs 188.5 crore from Rs 66.7 crore a year prior, with the EBITDA margin expanding significantly to 22.22% from 12.73%.
Despite these gains, the company's financial statements also highlighted substantial increases in inventory adjustments and land acquisition costs, which are key factors for investors to monitor as Puravankara continues to expand its development pipeline.
Contract Clarification
Puravankara also clarified that the contract with Red Connect Private Ltd. does not involve any interest from its promoter, promoter group, or other group companies in the awarding entity, nor does it qualify as a related-party transaction. This transparency aims to address any potential concerns regarding the nature of the business deal.
Overall, the Q1 performance, coupled with this new high-profile construction contract, signals a positive trajectory for Puravankara, reinforcing its position in the competitive real estate market.