Synopsis: Small-cap stock moves up by 2 percent as the construction company is awarded with a upgradation project of Electric traction system for the North Western Railway of Ajmer.
A small cap stock where the company is in the business of construction and infrastructure facilities (EPC and BOT basis) is in the spotlight after receiving a Rs.539.35 Crore project for the North Western Railway- Ajmer Project.
As the trading session started on Monday the stock price rose as high as Rs.203, which is a 2 percent rise from the previous day’s closing price of Rs. 199. The stock is Ashok Buildcon Ltd. and it has a market cap of Rs. 5,654 Crore.
Why is it in the news?
Ashok Buildcon Ltd. was awarded the LoA (Letter of Acceptance) from the president of India acting through the Chief Electrical Engineer (CEE), The North Western Railways(NWR), Jaipur. This is an upgradation project of the existing Electric traction system from the current 1 x 25 kV to a 2 x 25 kV.
Additionally, this project also includes the modification of the existing Overhead Electrification in order to facilitate trains moving at the speed of 160 kmph for the few sections of the Ajmer Division of North Western Railway. This order is expected to be executed within 24 months of time since the issuance of the LoA (11.11.2025).
Business Overview
Ashoka Buildcon Ltd commenced operations in 1976 and specializes in the construction and development of infrastructure projects, operating primarily on an EPC (Engineering, Procurement, and Construction) and BOT (Build, Operate, Transfer) model. Additionally, the company is involved in the production and sale of Ready-Mix Concrete (RMC) and the manufacturing of switchgear concrete.
The company’s order book for the quarter shows a Rs. 15,886 Crore plus worth of orders, with clients such as NHAI, MMRDA, MoRTH, Rail vikas Nigam and many other marquee clients. The company’s business is segmented as 49.2% in Road EPC, 11.6% in Road HAM, 31.4.% in Power T&D, 4.9% in Railways and 2.9% in Building EPC.
Financial Overview
When we look at the financials of Ashoka Buildcon Ltd. the company has witnessed a gain of 44 percent in its quarterly net profits, as the numbers stood at Rs.158 Crores in Q1FY25 and rose to Rs. 227 Crore in Q1FY26. On the other hand, the revenue has dropped by 23 percent from Rs. 2465 Crore in Q1FY2025 to Rs. 1887 Crore in Q1FY2026.
Additionally, the company has its revenue and profits grown at a CAGR of 19 percent and 49 percent respectively, over the last three years.
While talking about ratios and other parameters, the company has a ROCE of 40 percent and an EPS of Rs. 60.35. Another highlight is the PE ratio of 3.23, as it is one of the least in its Industry.
-Adithya Menon
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