Infrastructure stocks in focus; PNC, HG Infra, Ashoka Buildcon soar upto 7%

Shares of infrastructure companies were in focus with H G Infra Engineering, Ashoka Buildcon and PNC Infrastructure rallying up to 7 per cent on winning construction orders from the National Highway Authority of India (NHAI).

Ashoka Buildcon surged 6 per cent to Rs 90.90 on the BSE in Monday’s intra-day trade after the company on Saturday said it received a letter of intent (LoI) from Dakshinanchal Vidyut Vitran Nigam for the development of distribution infrastructure in Aligarh and Agra for a total outlay of Rs 807.64 crore.

The company will develop distribution infrastructure at Aligarh-2 Zone, which is the electricity distribution circle of Etah and Kasganj of Uttar Pradesh and also will also develop distribution infrastructure at Agra-1 Zone which is the electricity distribution circle of Fatehabad, Mainpuri, Firozabad and Firozabad of Uttar Pradesh, Ashoka Buildcon said in a statement.

Ashoka Buildcon is engaged in the business of construction of infrastructure facilities on engineering, procurement and construction basis (EPC) and built, operate and transfer (BOT) basis and sale of ready mix concrete.

In a separate filing, Ashoka Buildcon said the company has emerged as the lowest bidder (L-1) for the NHAI project in the state of Bihar, the bid value was Rs 2,161 crore.

Meanwhile, HG Infra Engineering hit a 52-week high at Rs 714.25, as the stock surged 7 per cent in intra-day trade today. In past two weeks, the stock has zoomed 33 per cent on bagging multiple orders. On December 30, 2022, the company said it has been declared as L-1 bidder by Delhi Metro Rail Corporation Limited (DMRC). The bid project cost is Rs 412.11 crore.

On December 29, the company announced receipt of Letter of Award (LOA) from NHAI for Hybrid Annuity Mode (HAM) project in the state of Haryana. The bid project cost was at Rs 997.1 crore.

Lastly., PNC Infratech too, hit a 52-week high of Rs 332.60, up 5 per cent on the BSE in intra-day trade today after the company announced that its subsidiary, Hathras Highways ((SPV/Concessionaire) received 'Appointed Date' of January 2, 2023 for the HAM project of NHAI.

According to ICICI Securities, PNC is likely to be one of the major beneficiaries of the thriving roads and water supply segment (Jal Jeevan Mission). The strong order book position, receipt of appointed date in most of its projects and execution pick-up are expected to translate to 11.7 per cent topline CAGR over FY22-24E along with stable margins. The company has planned monetisation of HAM/ annuity assets, the brokerage firm said in its stock update.

Meanwhile, the Ministry of Road Transport and Highways (MoRTH) has constructed 3,559 km of National Highway during H1FY23 compared to 3,824 km constructed during H1FY22, mainly impacted by higher input cost along with a heavy and prolonged monsoon period.

Further, the award figure was at 4,092 km in H1FY23 (vs. 4,609 km during H1FY22). Overall, the authority is aiming to award ~6,500 km of road projects during FY23.