IRCON International Q2 Results Review - Order Win Is Must: IDBI Capital

IDBI Capital Report

Ircon International Ltd.'s Q2 FY25 PAT came below with our estimates. Operating performance was weak as Q2 FY25 Revenue declined by 20% YoY and and adjusted Ebitda margin at 4.5% was down 140 bps YoY.

Ircon guides revenue growth to be flat on YoY basis in FY25 and Ebitda margin to be maintained at the same level. Ircon’s order win has been lukewarm and order book has seen weakness at Rs 242 billion in Q2 FY25 versus Rs 321 billion YoY. This we understand could impact revenue of FY25E/26E, which could partially be seen in H2 FY25. Opportunity remains huge for Ircon and thus awaits order win.

We value the company on SOTP with target price of Rs 202. Target price implies valuation of ~18.5 times FY26E EPS. Retain Hold rating on the company, stock catalysts are execution uptick and order win.

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