Afcons Infrastructure , a part of the Shapoorji Pallonji group, saw its shares climb 3.7% to Rs 434.45 following a significant contract win in Croatia. The company has emerged as the lowest bidder for a major railway project, marking a substantial international expansion.

Croatia Railway Project Details

Afcons Infrastructure has been declared the Lowest Bidder (L1) by HŽ Infrastruktura d.o.o. for a railway line rehabilitation and construction project in Croatia. The contract, valued at €677,071,899.78 (approximately Rs 6,800.00 crore) excluding VAT, involves:

• Reconstruction of existing track
• Construction of a second track on the Dugo Selo - Novska railway line
• Overhead electrification
• Signalling and telecommunication works

The project has a completion timeline of 72 months from the commencement date.

Stock Performance and Analyst Outlook

Despite the recent 3.7% gain, Afcons Infrastructure's stock has experienced a decline over the past six months:

However, analysts maintain a positive outlook on the stock:

• Current rating: Strong Buy
• Average target price: Rs 543.00
• Potential upside: 30% from current levels

Credit Rating Withdrawal

In a separate development, Afcons Infrastructure has withdrawn its credit ratings for bank facilities from ICRA Limited. The withdrawal process includes:

• Received no-objection certificates from most bankers
• Pending completion of documentation with Bank of Baroda
• ICRA to withdraw ratings in line with its policy upon completion of required documentation

Company Outlook

The significant contract win in Croatia demonstrates Afcons Infrastructure's capability to secure large international projects. This €677 million project not only adds substantially to the company's order book but also expands its global footprint in the infrastructure sector.

While the stock has faced some pressure in recent months, the new contract and analysts' positive outlook suggest potential for recovery. Investors and market watchers will likely keep a close eye on the company's execution of this project and its impact on future financial performance.

Afcons Infrastructure , a part of the Shapoorji Pallonji group, saw its shares climb 3.7% to Rs 434.45 following the announcement of a significant railway project win in Croatia. The company has emerged as the lowest bidder for a contract awarded by HŽ Infrastruktura d.o.o., solidifying its position in the international infrastructure sector.

Project Details

The project, valued at €677 million (approximately Rs 6,800 crore) excluding VAT, involves the reconstruction of existing track and the construction of a second line on the Dugo Selo–Novska railway route. The scope of work includes:

• Reconstruction of the existing track
• Construction of a second track
• Overhead electrification
• Signalling and telecommunication works

According to the company's disclosure to the stock exchanges, the project has a completion timeline of 72 months from the commencement date.

Financial Implications

This contract win represents a significant addition to Afcons Infrastructure's order book. At the current exchange rate of 1 Euro = INR 100.44, the project value translates to approximately Rs 6,800 crore, providing a substantial boost to the company's future revenue prospects.

Stock Performance

Despite the recent 3.7% gain following the news, Afcons Infrastructure's stock has faced challenges in the broader market:

• 17% decline over the past six months
• 22% decrease year-to-date

However, analysts maintain a positive outlook on the stock:

Company Updates

In addition to the railway contract win, Afcons Infrastructure has recently made other significant announcements:

1. The company has requested the withdrawal of credit ratings for its bank facilities from ICRA Limited, based on no-objection certificates received from most of its bankers.
2. ICRA has already withdrawn ratings for bank facilities except for those from Bank of Baroda, for which the withdrawal process is ongoing.

These developments, along with the major contract win in Croatia, indicate that Afcons Infrastructure is actively managing its financial profile while expanding its international project portfolio.

As the company moves forward with this substantial railway project in Croatia, investors and market watchers will likely keep a close eye on Afcons Infrastructure's execution capabilities and the potential impact on its financial performance in the coming years.