Dilip Buildcon hits 52 week low, stock drops 30% in 5 weeks

Dilip Buildcon shares continued to rally under selling pressure, with the share hitting a new 52-week low at Rs 394, down 3% from BSE in intraday trading on Friday. The stock of the road and highway construction company fell below its previous low of Rs 403 hit on January 25, 2021.

Over the past five weeks, Dilip Buildcon’s share price has fallen 30% despite the company clarifying that there has been no “raid on the company’s official and residential premises.”

“In this regard, it is specified that the team of the investigation agency (Central Bureau of Investigation) visited the premises of the company and the residence of the executive director concerned in Bhopal on 31-12-2021 and researched operational and financial information on certain officials and employees of the company, ”said Dilip Buildcon on January 2, 2022. CLICK HERE FOR ALL THE DETAILS.

In addition, on January 8, 2022, Dilip Buildcon informed the exchanges that the executive director of the company had been released from the custody of the investigative agency by the special judge of the honor court, CBI.

With the agency’s investigation, the company’s plans are in full swing, and the company’s operations go uninterrupted. It is hoped that soon the misunderstandings will be clarified for all concerned, the company said.

However, over the past three months, the stock has trended lower, down 43% following weak executions in the July-September quarter (T2FY22). In comparison, the S&P BSE Sensex edged down 0.5%. Slow execution in large projects; a prolonged monsoon; soaring commodity prices, especially bitumen, diesel and steel; and no early completion bonus removed the EBITDA margin to 10.6 percent.

The high volatility of commodity prices has led to a reduction in the coverage of price escalation to 50-60 percent in EPC projects and 40 percent in EPC HAM, while the rest is achieved with annuity payments. Therefore, going forward, margins are expected to be in the 14-15% range, HDFC Securities analysts said in the earnings update.

For the first half (April-September) of fiscal year 2021-22 (S1FY22), Dilip Buildcon recorded a 90 percent drop in year-over-year net profit to Rs 7.7 crore, from Rs 81.10 crore at S1FY21. The EBITDA margin contracted 401 basis points to 11.87% from 15.88%.

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