The stock of road construction player Dilip Buildcon zoomed 18 per cent last week on the news of contract wins and bonus payments it may receive for completing a couple of projects well ahead of the deadlines.
The company’s shares have tripled in the last one year, as it kept adding to its order book and its execution of many existing projects meant that revenues and profits have been spectacular in the nine months of FY18.
Dilip Buildcon already has an order book of over ₹20,000 crore, which is nearly three times its trailing 12-month revenue. The company appears well on course to reach its revenue guidance of ₹10,000 crore for FY19.
A rising debt-equity ratio and strain on working capital are concerns for the company. But capex has to happen, especially for executing large highway construction projects.
Dilip Buildcon has bagged many contracts under the HAM (hybrid annuity model) mode, apart from its stronghold of EPC contracts.