IRCON International Q4 Results Review - To Watch For Execution: IDBI Capital

IDBI Capital Report

IRCON International Ltd.'s Q4 FY24 adjusted profit after tax came lower than our estimate. Reported profit after tax has one off gain of Rs 660 million from prior period claims. Operating performance was weak as Q4 FY24 revenue declined by 1% and and adjusted Ebitda margin at 6.2% was flat QoQ.

IRCON guides revenue growth to be flat on YoY basis in FY25and Ebitda margins to be maintained at the same level. Its order win has been lukewarm and order book has seen weakness at Rs 272 billion (FY24) versus Rs 351 billion YoY.

This we understand could impact revenue of FY25E/26E, partially could be seen in Q4 FY24. Opportunity remains huge for IRCON and thus awaits order win. We value IRCON on SOTP with target price of Rs 268. Target price implies valuation of ~26 times FY26E EPS and book value basis at 3.6 times FY26E book value.

Retain Hold rating on the company, stock catalyst execution uptick and order win.

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