IRCON International Awarded ‘Navratna’ Status, Shares Surge

IRCON International Awarded 'Navratna' Status, Shares Surge

VoM News Desk | October 13, 2023 | 04:34 PM IST | Breaking News | Follow on Google News

IRCON International Awarded ‘Navratna’ Status, Shares Surge

IRCON International Awarded ‘Navratna’ Status, Shares Surge

IRCON International, a public sector undertaking (PSU), saw its shares surge by 7.2% to ₹143.75 apiece in early Friday trading following the company’s announcement that it had been granted ‘Navratna’ status by the Department of Public Enterprises. This prestigious recognition designates IRCON as the 15th Navratna company among the Central Public Sector Enterprises (CPSEs).

In a related development, the Department of Public Enterprises also conferred ‘Navratna’ status on another PSU, RITES, elevating it to the 16th Central Public Sector Enterprise to receive this prestigious status. Consequently, shares of RITES experienced a nearly 7% increase in early Friday trade, reaching ₹506.30 apiece.

Over the past year, PSU stocks have demonstrated a significant uptrend, attributed to robust order books, strong earnings, and increased government capital allocation, as evident in the recent Union Budget. The S&P BSE PSU index has advanced by a remarkable 40.69% in the past year, with 25 stocks delivering returns exceeding 90%.

In this context, IRCON International has notably stood out, delivering an impressive annual return of 236.6%, securing the fifth position among the top gainers in the index. RITES has also performed well, ranking 36th in the index with a yearly return of 44.3%, according to Trendlyne data.

‘Navratna’ companies are chosen based on their financial performance, operational efficiency, and their strategic significance to the Indian economy. These companies enjoy more decision-making autonomy regarding investments, joint ventures, mergers, and acquisitions.

Other companies that hold ‘Navratna’ status include Bharat Electronics, Shipping Corporation of India, Hindustan Aeronautics, Rashtriya Ispat Nigam, Engineers India, NMDC, National Buildings Construction Corporation, ONGC Videsh, NLC India, Oil India, Mahanagar Telephone Nigam, National Aluminium Company, and Container Corporation of India. ‘Navratna’ companies can achieve ‘Maharatna’ status by meeting specific performance benchmarks and fulfilling eligibility criteria.

In a separate development, IRCON International executed a contract agreement with Sri Lanka Railways in September for the procurement, design, installation, testing, commissioning, and certification of the signalling and telecommunication system along the Indian Line of Credit. The total contract value was approximately $14.89 million (around ₹122 crore).

Domestic brokerage firm Antique Stock Broking recently initiated coverage on IRCON International with a ‘buy’ rating and a target price of ₹176 per share, implying a potential upside of over 21.37% from the stock’s latest closing price.

On another front, RITES emerged as the lowest bidder in a tender floated by Bangladesh Railway, securing a contract for the procurement of 200 broad-gauge passenger carriages with an estimated contract value exceeding $111.3 million (over ₹900 crore).

VoM News Desk

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