Stock falls 8.8% amidst disappointing earnings report
Shares of Ircon International fell 8.8 per cent on Wednesday, hitting a 52-week low of ₹163.85 per share on the BSE. The sharp decline followed the company’s weaker-than-expected Q3 earnings, which saw a significant drop in profitability.
As of 9:54 AM, shares of Ircon International were trading 8.12 per cent lower at ₹165.15 per share on BSE, compared to a 0.91 per cent decline in the BSE Sensex, which stood at 75,597.5. The company’s market capitalisation was reported at ₹15,532.62 crore.
Over the past year, the stock has traded within a range of ₹163.85 to ₹351.65, with today’s low marking the weakest level in 52 weeks.
Q3 earnings report: Steep drop in net profit
In its Q3 financial results, Ircon International reported a 64.8 per cent decline in net profit year-on-year (Y-o-Y), with profit after tax (PAT) falling to ₹86.1 crore from ₹244.7 crore in the same quarter last year.
On a quarter-on-quarter (Q-o-Q) basis, the company’s net profit slumped 58.2 per cent, down from ₹205.9 crore in the previous quarter (Q2 FY25).
Despite the sharp fall in net profit, the company reported a 10.8 per cent increase in revenue Y-o-Y, rising to ₹2,612.9 crore, compared to ₹2,929.5 crore a year ago. Sequentially, revenue from operations rose 6.8 per cent, up from ₹2,447.5 crore in Q2.
EBITDA & margin decline
Ircon International’s core Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) fell 52.9 per cent Y-o-Y to ₹139.3 crore, compared to ₹295.8 crore in the same quarter last year.
The EBITDA margin witnessed a steep decline of 480 basis points (bps), slipping to 5.3 per cent from 10.1 per cent a year ago.
The weak performance in EBITDA and margin deterioration suggests higher operational costs and lower efficiency in project execution.
Order book & competitive bidding share
As per the company’s filing, Ircon International’s order book as of 31st December 2024 stood at ₹21,939 crore.
A key highlight was that 53 per cent of the total order book was secured through competitive bidding, reflecting the company’s continued focus on expanding its project pipeline through open-market tenders.
Earnings per share (EPS) & dividend announcement
For the quarter, earnings per share (EPS) stood at ₹0.92 per equity share, with a face value of ₹2 per share.
Despite the weak results, Ircon International declared an interim dividend of ₹1.65 per equity share for the financial year 2024-25. The record date for dividend payment is set for Monday, 17th February 2025.
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Company profile & market performance
Ircon International, a Navratna public sector enterprise, operates under the Ministry of Railways and specialises in railway and highway infrastructure development.
Over the past year, Ircon International shares have gained 8.2 per cent, slightly outperforming the Sensex’s 7.3 per cent rise during the same period.
Despite this, the recent sharp drop in profit and margin contraction has triggered a negative market reaction, raising concerns over the company’s short-term growth prospects.
Outlook & investor sentiment
The sharp drop in Ircon International’s Q3 profit and EBITDA margin has led to a significant sell-off in the stock, as investors react to concerns over profitability pressures and higher costs.
While the growth in revenue and strong order book provide some long-term stability, the near-term outlook remains uncertain, with market participants closely monitoring the company’s ability to improve margins and operational efficiency in the coming quarters.
With the stock hitting a 52-week low, investors will be keenly watching upcoming financial performance, order execution progress, and management commentary to assess the company’s future recovery potential.
