Synopsis:
Rachana Infrastructure Ltd surged after announcing a Rs 10.28 crore order for the Prantij–Harsol Road project in Gujarat. The contract involves CC road construction, road furniture, and related works over a 20 km stretch in the Sabarkantha district. The project must be completed by September 19, 2029, with added performance securities required from the company.
The shares of this infrastructure company are in focus after bagging a key contract, boosting the order book of the company. In this article, we will dive more into the details of this order.
With a market capitalization of Rs 63.7 crore, the shares of Rachana Infrastructure Ltd hit a day high of Rs 36.40 per share, up by 2.25 percent from its previous day closing price of Rs 35.60 per share. In the last one year, the stock has corrected by over 37 percent.
About the order
Rachana Infrastructure Limited recently announced, through a stock exchange filing, that it has received a Letter of Acceptance from the Office of the Executive Engineer, Road and Building Division, located in Himatnagar, Gujarat.
This order pertains to the Prantij–Harsol Road project (Km 0/00 to 20/00, Section 0/00 to 2/650), which is associated with a contract worth Rs. 10.28 crore, awarded at a competitive rate of 13.50 percent below the estimated cost of Rs. 11.89 crore.
The project involves constructing a CC road, adding road furniture, and handling various other tasks along the stretch from Km 0/00 to 20/00 (specifically Section 0/00 to 2/650) in the Sabarkantha district.
According to the contract, the company needs to provide an additional performance security of Rs. 51.40 lakh within 10 days of receiving the LOA, plus another security of Rs. 8.32 lakh to ensure validity beyond 28 days after the project completion date, which is set for August 8, 2026. The execution period for this project is set to extend up to and beyond 60 days, but it must be completed no later than September 19, 2029.
Also Read: Stock hits 5% upper circuit after securing ₹151 Cr KAVACH order from West Central Railways
Financial Highlights
The company reported a revenue of Rs 94.16 crores in FY25, up 3 percent from Rs 91.48 crores in FY24. Coming to its profitability, it reported a net profit of Rs 4.10 crores in FY25, up 13 percent from Rs 3.63 crores in FY24.
The stock delivered a poor ROE and ROCE of 4.28 percent and 7.18 percent respectively, and is currently trading at a P/E of 15.54x as compared to its industry average of 21x.
Rachana Infrastructure Ltd (RIL), founded in 2001, is a dynamic player in the infrastructure and construction sector, boasting nearly twenty years of experience in civil and infrastructure projects. What started as a local contractor in Ahmedabad has blossomed into a nationwide operation, spanning five states. RIL’s main strengths are in roads, irrigation projects, and government contracts.
Written by Satyajeet Mukherjee
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