Dilip Buildcon shares rise 5% after Rs. 1,115 crore contract win

Shares of Dilip Buildcon gained momentum on September 24 after the company’s joint venture won a large-scale infrastructure contract worth Rs. 1,115.37 crore, sparking fresh confidence in its order pipeline.

At one point during trading, the stock advanced as much as 5.4 percent, touching Rs. 585, its strongest intraday surge since September 12. By midmorning, it moderated to around Rs. 553, still reflecting a gain despite broader market weakness, with the Nifty 50 index down about 0.27 percent.

The joint venture (DBL-PSP JV) emerged as the lowest bidder for a project floated by the Kerala Industrial Corridor Development Corporation Ltd., securing the order to design, build, test, commission as well as operate and maintain infrastructure works in the Pudussery Central and Kannambra zones of the Palakkad node.

This project is part of the broader plan to extend the Chennai–Bengaluru Industrial Corridor (CBIC) to Kochi via Coimbatore. The contract’s duration is fixed at 42 months, giving the JV ample time to deliver in phases.

By taking up both the construction and operation & maintenance (O&M) components, the JV not only earns revenues during build-out but also has a recurring income stream post-commissioning.

Financials and order book strength

Dilip Buildcon’s latest quarterly performance already set an encouraging backdrop. In Q1 FY26, its consolidated net profit jumped 93.6 percent year on year to Rs. 271 crore (from Rs. 140 crore). Profit before tax more than tripled to Rs. 330.50 crore, compared to RS. 113.47 crore the prior year.

However, revenue from operations slipped 16.4 percent to Rs. 2,620 crore (from Rs. 3,134 crore), indicating some softness in executing existing contracts. On the positive side, its EBITDA (excluding other income) rose by 8.7 percent to Rs. 520 crore, from Rs. 478 crore.

Importantly, the company carries a robust order book of Rs. 14,923 crore, which gives it decent visibility into upcoming revenue streams.

Analysts note that the firm has already added further orders after Q1, including two contracts totalling around Rs. 3,800 crore, reinforcing inflow momentum. The company’s guidance for FY26 envisions revenues of Rs. 8,000-8,500 crore (Rs. 80-85 billion) and an EBITDA margin of about 11 percent.

In its mine developer & operator (MDO) division, operations are performing strongly: the Pachwara mine scaled to about 7 million tonnes and Siarmal to roughly 19 million tonnes, both exceeding prior forecasts.

Market reaction and risks ahead

Investors responded positively to the news, sending the stock to its biggest intraday gain in weeks. The move also snapped a four-day losing streak, with trading volumes surging, the stock traded at 36 times its 30-day average volume at one stage.

Year to date, Dilip Buildcon’s stock has delivered a 24 percent return, substantially higher than the Nifty’s 6 percent gain over the same period. Its market capitalisation now stands at about Rs. 9,036.81 crore.

While the new contract strengthens its project portfolio and revenue pipeline, execution discipline will be key. Challenges such as cost overruns, material inflation, regulatory delays, and site mobilization hurdles can affect margins.

The O&M component gives the JV some downside cushion but also introduces long-term operational risk. For the company to convert this contract into cash flows, diligent management of timelines, subcontractors, and operating efficiency will matter greatly.

The Rs. 1,115.37-crore Kerala industrial corridor project win arrives at an opportune moment for Dilip Buildcon, when its financials have shown a sharp rebound and its order backlog is strong. If execution proceeds smoothly, markets may see this as validation of the company’s growth trajectory and a catalyst for further upside.