Inspite of a poor Q2 operational performance, Dilip Buildcon shares surge 5%

8 Nov 2023 , 02:08 PM

After Dilip Buildcon reported poor operational performance in the second quarter FY24, the company’s shares surged 5% during the afternoon of November 8.

Due mostly to increased raw material costs and unusual charges throughout the quarter, the construction company’s EBITDA margin decreased to 12% in the July–September quarter from 13.6% in the previous year.

Dilip Buildcon’s shares were trading over 5% higher at Rs 362.45 on the NSE at 1:49 p.m. 

Revenue increased by over 10% to Rs 2,848.70 crore from Rs 2,596.80 crore in the base quarter, while net profit increased to Rs 68.6 crore from Rs 17 crore a year earlier despite the poor operational performance. The engineering, procurement, and construction (EPC) projects and road infrastructure maintenance segment, which accounted for over 99% of the total topline, were the primary drivers of the revenue increase.

Nevertheless, the company’s sales growth remained less than that of competitor Thermax, which increased by 11%, and Larsen & Toubro, which increased by 19%.

Due to lower road infrastructure spending following the monsoon season, the company’s orderbook declined to Rs 23,988.60 crore in July-September from Rs 24,050.90 crore in the previous quarter. At Rs 7,967.70 crore, or 33.21% of the orderbook, the road and highways segment retained the largest stake.

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