J Kumar Infra JV Secures ₹182 Crore Contract to Boost Bengaluru Metro.
Following the announcement of the contract, J Kumar Infraprojects' share price has risen by 4.26% to reach an intraday high of ₹249.60. This increase in share price is a result of the positive market sentiment towards the company's latest contract.
J Kumar Infra JV Secures ₹182 Crore Contract to Boost Bengaluru Metro.
Shares of J Kumar Infraprojects, an infrastructure business, surged substantially in Tuesday’s session after the company received an order for ₹182 crores.
An airport maintenance facility for the Bangalore Metro Rail Project is now under construction at a contract cost of 182.34 crores, has been approved by Bangalore Metro Rail Corporation, according to a Monday exchange filing from the company’s joint venture, J Kumar-AICPL.
Market Reaction
Following the announcement of the contract, J Kumar Infraprojects’ share price has risen by 4.26% to reach an intraday high of ₹249.60. This increase in share price is a result of the positive market sentiment towards the company’s latest contract.
Over the previous year, the stock experienced a remarkable return of 48.79%, going from 167.75 to the recent trading price of 249.60. This is a clear indication of investors’ faith in the company’s ability to execute projects and generate profits.
Impressive Performance in December Quarter
Domestic brokerage firm HDFC Securities has stated its upbeat perspective on the company’s shares despite its high increases. This comes due to the company’s strong December quarter performance, which is just barely above the brokerage’s estimates.
The company’s balance sheet is still strong, with 4.8 billion in gross debt and a D/E ratio of 0.20x. This indicates that the company has a strong financial position, which can help it execute projects efficiently.
Capex Guidance
The company revised its capital projection for FY23 to $1.5 billion and expended capex of $1.1 billion in 9MFY23. This indicates that the company is planning to invest heavily in its business, which could lead to increased revenues and profits in the future. The company’s increased capex guidance also indicates its confidence in its ability to secure new contracts and execute them efficiently.
HDFC Securities’ annual forecasts for JKIL’s execution, order inflow, and balance sheet are generally in line with the company’s quarterly outperformance.
In 9MFY23, JKIL took in orders totalling 16.9 billion, raising the total order book as of December 22 to 112 billion, or 3.2 times the revenue from FY22. Geographically, Maharashtra (68% of the order book’s exposure) comes in first place, with Delhi/Gujarat/UP contributing 25/6/1%.
According to the brokerage, the business segments of the subterranean metro, elevated metro, flyovers, highways, tunnels, water, and civil each contributed 26/26/20/14/10/4%.
The business updated its forecast for order inflow for FY23, which was 50 billion, of which 33.8% was realised in 9MFY23. The bid pipeline is 450 billion over the upcoming 12 months.
HDFC Securities has maintained its “buy” recommendation on the company and boosted its target price to ₹387 apiece. This represents an upside of 55% from the stock’s current trading price. On average, the five analysts surveyed by MintGenie rate the stock as a “buy.”
Impact on Bengaluru Metro
The construction of the airport depot will be a significant boost to the Bengaluru Metro Rail Project. This project is a crucial initiative of the Government of Karnataka, aimed at providing efficient and sustainable public transport to the citizens of Bengaluru. The airport corridor is a crucial section of this project, connecting the city centre with the Kempegowda International Airport.
The construction of the airport depot will enable the smooth operation of trains on this corridor. It will provide a dedicated facility for the maintenance and stabling of trains, which is essential for ensuring the safety and reliability of the metro system. This project will also create job opportunities for local residents and contribute to the economic development of the region.
Significance for J Kumar Infraprojects Limited
The contract awarded to J Kumar-AICPL is a significant achievement for J Kumar Infraprojects Limited. The company has a strong track record in the construction of infrastructure projects such as highways, bridges, and metro rail systems. The successful completion of this project will further enhance the company’s reputation as a reliable and efficient infrastructure contractor.
The positive response of the market to this news is a reflection of the confidence that investors have in the company’s capabilities. The increase in the company’s share price is a testament to the market’s recognition of the company’s expertise in the construction of metro rail projects. This contract is also expected to contribute significantly to the company’s revenue and profitability.
The contract awarded to J Kumar-AICPL for the construction of an airport depot for the Bengaluru Metro Rail Project is a significant development for the company and the project. The successful completion of this project will provide a crucial facility for the operation of trains on the airport corridor, contributing to the efficiency and reliability of the metro system.
This project will also create job opportunities and contribute to the economic development of the region. The positive response of the market to this news reflects the market’s confidence in the company’s capabilities and is expected to contribute significantly to the company’s revenue and profitability.
Edited by Prakriti Arora
