The shares of the leading infrastructure company hit 2 percent upper circuit after the company received a significant letter of acceptance for EPC works worth Rs 86.54 crore.
With a market capitalization of Rs 515.95 crore, the shares of AVP Infracon Ltd were trading at Rs 206.55 per share, increasing around 2 percent as compared to the previous closing price of Rs 202.50 apiece.
Reason for Rise
The shares of the company have seen bullish movement after AVP Infracon Ltd received a significant letter of acceptance from Superintending Engineer Highways Construction and Maintenance for widening from Two Lane to Four Lane of Tiruvannamalai Circle in the State of Tamil Nadu. The aggregate value of this order is Rs 86.54 crore.
Financial condition
Analyzing the company’s financial performance, revenue zoomed by 52 percent from Rs 63 crore in H1FY24 to Rs 96 crore in H1FY25 but during the same time, net profit stretched by 85 percent from Rs 7 crore to Rs 13 crore.
Recent achievements
The company secured two NHAI contracts worth ₹41.25 crores and back-to-back projects totaling ₹70 crores, including a Bagalur bypass and Kallakurichi-Tiruvannamalai widening. CRISIL upgraded its credit rating, and it inaugurated a third ready-mix concrete plant in Dharapuram with a 90% stake.
Future Outlook
The company is expanding beyond Tamil Nadu into Madhya Pradesh, Andhra Pradesh, and Telangana, exploring joint ventures to strengthen capabilities. It anticipates ₹750 crores in fresh orders for FY ’25, mainly from roads, and targets ₹500 crore turnover by FY ’26, backed by a ₹1,000 crores order book.
Margin guidance
Management is committed to sustaining current margins without projecting increases. The focus remains on profitability through operational efficiency and cost management, ensuring stable financial performance. By optimizing operations and controlling expenses, the company aims to maintain its margins while navigating market challenges effectively.
Order Book
The company has an unexecuted order book of ₹250 crores and is actively bidding for new tenders to sustain a strong order book ratio. Short-term loans have risen due to bill discounting and factoring, but management assures no long-term debt concerns.
Strategic Investments
The company invested ₹3.6 crores for a 90% stake in Kanthan Blue Metals, supporting sustainable growth. It aims to expand into new regions and sectors, including irrigation and high-rise buildings, reinforcing its strategic vision for long-term growth and diversification.
Company Profile
AVP Infracon Limited is engaged in the construction of road projects based on Bill of Quantities (BOQ) and Engineering, Procurement, and Construction (EPC) methods. The company undertakes various types of infrastructure developmental and construction works like Expressways, National Highways, Flyovers, Bridges, and others.
Written by Abhishek Singh
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