Ircon International Limited, a leading engineering and construction company, has announced significant new order wins, bolstering its project portfolio and market position.

New Order Details

IRCON has secured two substantial orders:

1. A contract from Mumbai Metropolitan Region Development Authority (MMRDA) valued at ₹4,712,972,820.00 (approximately ₹471.30 crore) and €2,837,178.00.
2. A project from Rail Vikas Nigam Limited (RVNL) worth ₹7,557,821,993.63, of which IRCON's share is ₹5,290,475,395.53 (approximately ₹529.05 crore).

MMRDA Project Scope

The MMRDA contract, identified as CA-239, Line-5, Package-2, involves comprehensive work for the Mumbai Metro Rail Line 5 Project. Key components include:

• Design, manufacture, supply, installation, integration, testing, and commissioning of a 220 kV receiving substation
• Complete 25kV overhead catenary system with switching station
• 33kV auxiliary power distribution system
• SCADA system implementation
• Electrical and mechanical works, including lift and escalator installations

The project timeline comprises a 108-week design-build period, followed by a 2-year defects liability maintenance period, and a 5-year comprehensive maintenance phase.

RVNL Project Details

The RVNL project, secured in a joint venture with JPWIPL (IRCON - 70%, JPWIPL - 30%), focuses on the construction of a new broad gauge railway line between Pipaliya Nankar and Budni stations in Madhya Pradesh. The scope includes:

• Construction of roadbed and minor bridges
• Building construction
• Track installation (excluding supply of rails, sleepers, and thick web switches)
• Civil engineering and general electrical works

This project has a 36-month execution period, followed by a 6-month defect liability period.

Financial Implications

The combined value of these orders significantly enhances IRCON's order book:

These new contracts underscore IRCON International's strong market position and its ability to secure high-value projects in the infrastructure sector. The diverse nature of these projects, spanning metro rail systems and railway line construction, showcases the company's wide-ranging expertise in the transportation infrastructure domain.

As IRCON continues to expand its project portfolio, these new orders are expected to contribute significantly to the company's revenue stream in the coming years, reinforcing its position as a key player in India's infrastructure development landscape.

Ircon International Limited, a prominent public sector construction company, has secured multiple significant contracts in the railway infrastructure sector, totaling over ₹1,800 crore.

Mumbai Metro Contracts

Ircon International has secured two orders totaling ₹1,113.00 crore from Mumbai Metropolitan Region Development Authority for Mumbai Metro Rail Lines-5 and Line-6:

1. The first order, worth ₹471.00 crore, covers Line-5 package 2, involving design, supply, and installation of power systems, electrical works, lifts, and escalators with a 108-week build period.

2. The second order, worth ₹642.00 crore, is for Line-6 package-2 covering Swami Samarth Nagar to Vikhroli with a similar scope and 104-week timeline.

Both projects include five years of comprehensive maintenance after initial defect liability periods.

Rail Vikas Nigam Limited Contract

In addition to the Mumbai Metro contracts, Ircon International has clinched a significant contract worth ₹755.78 crore from Rail Vikas Nigam Limited (RVNL). This contract encompasses a comprehensive range of railway construction activities:

• Construction of roadbed and minor bridges
• Building construction
• Track installation (excluding supply of rails, sleepers, and thick web switches)
• Other civil engineering works
• General electrical works

The project is part of the new broad gauge (BG) railway line between Pipaliya Nankar (excluding) and Budni (including) stations, covering chainage from 129.000 to 198.000 km in the Indore-Budni section of Bhopal Division, West Central Railway, Madhya Pradesh.

Joint Venture and Project Share

Ircon International has secured the RVNL project in a joint venture with JPWIPL, with Ircon International holding a 70% share and JPWIPL holding 30%. Ircon International's share of the contract value amounts to ₹529.05 crore, inclusive of GST.

Project Timeline and Scope

The RVNL contract stipulates a completion period of 36 months for the main works, followed by a 6-month defect liability period (DLP).

Financial Implications

The combined value of these contracts, totaling over ₹1,800 crore, represents a significant addition to Ircon International's order book. These projects are expected to contribute substantially to the company's revenue stream over the next few years.

Market Impact

Despite the substantial order wins, Ircon International shares closed 1.52% lower at ₹186.90, underperforming the Nifty's 0.57% decline. The stock has dropped 40.25% over 12 months and 16.75% year-to-date. Analyst recommendations show one hold and two sell ratings with average price targets indicating 11.20% potential downside.

However, these contract wins demonstrate Ircon International's strong position in the railway infrastructure sector and its ability to secure large-scale projects. They also highlight the ongoing investments in India's railway and metro networks, which could have positive implications for the infrastructure and construction sectors in the long term.

As these projects progress, they are expected to enhance rail connectivity in various regions and contribute to the country's economic growth.