The shares of this microcap clocked a 5 percent upper circuit in Thursday’s trading session after receiving an order worth Rs. 287 crores for major pipeline irrigation project.
Price Movement:
With a market capitalization of Rs. 115 crores, the shares of Rachana Infrastructure Ltd started Thursday’s trading session on a flatter note at Rs. 58.70. During the trading session, the shares locked a 5 percent upper circuit at Rs. 61.60 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had been awarded a significant subcontract for a pipeline irrigation scheme by LCC PROJECTS PRIVATE LIMITED worth over Rs. 287 crores.
The company is responsible for doing survey, design, supervision, management, execution and Operation with maintenance of the said Project as per the terms and conditions of Subletting the Project.
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The company received the project under the Palamu Pipeline irrigation scheme (Package-II) on a turnkey basis with 10 years of operation, maintenance and management (OMM).
Financials:
Looking at the company’s financial statements, the revenue zoomed by 142 percent from Rs. 26.67 crores during H1FY24 to Rs. 64.80 crores in H2FY24. In addition, the net profits magnified by 240 percent from Rs. 85 lakhs to Rs. 2.90 crores during the same period.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 3.86 percent and a return on capital employed (RoCE) of 6.79 percent for the period spanning FY23-24. Further, the net profit margin stood at 3.96 percent during the same timeframe.
Customer Base:
Rachana Infrastructure Ltd caters to a diverse clientele, including both government and private sectors. Its clients comprise Madhya Pradesh Road Development Corporation Limited, NBCC Ltd, the Ministry of Road Transport and Highways, ONGC Petro Additions Limited, Oil and Natural Gas Corporation Limited, and Larsen & Toubro Limited.
Shareholding Pattern:
According to the latest shareholding pattern, Promoters hold 65.38 percent of the shares, and Retail Investors hold the remaining 34.62 percent.
Company Profile:
Incorporated in 2001, Rachana Infrastructure Ltd specialises in various sectors including road construction, irrigation projects, and quarry mining.
It operates on a Bill of Quantities (BOQ) and Engineering, Procurement, and Construction (EPC) basis, focusing on the construction of highways, urban roads, multi-storied buildings, and other civil works.
Written By Vaibhav Patil
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