IRCON International Q3 Results Review - Good Quarter; Order Win Has Been Lukewarm: IDBI Capital

IDBI Capital Report

IRCON International Ltd.’s revenue for Q3 FY24 at Rs 28 billion was robust at +25% YoY. Execution of orders has been consistent and in 9M FY24 revenue increased by 33% YoY versus the company's guidance of +15% for FY24E.

Post Q3 FY24 IRCON continues to guides for revenue of Rs 115 billion in FY24E which implies 15% revenue increase. IRCON order win has been lukewarm and order book has seen weakness at Rs 294 billion (9M FY24) versus Rs 380 billion YoY.

This we understand could impact revenue of FY25E/26E. We have currently modeled order inflow of Rs 125 billion/150 billion and revenue increase of 10% pa for FY25E/26E.

Given strong run up in the stock price we have lowered our rating to Hold. We value IRCON on SOTP with target price of Rs 216. Target price implies valuation of ~21 times FY26E earnings per share and book value basis at three times FY26E book value.

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