ITD Cementation shares zoom 15% to hit one-year high; here's why

Shares ITD Cementation India Ltd rose sharply in Friday's trade, extending their gains for the third straight session. The stock soared 14.67 per cent to hit a 52-week high of Rs 249.40 against its previous close of Rs 217.50. On BSE, around 7.16 lakh shares changed hands today. This was way more than the two-week average volume of 1.02 lakh shares. Turnover on the counter came at Rs 17.32 crore, commanding a market capitalisation (m-cap) of Rs 4,115.17 crore. There were 99,857 sell orders today over buy orders of 84,777 shares.

Today's sharp up move in the share price came after the company bagged a marine contract. "This is to inform you that ITD Cementation India Ltd has today secured a marine contract worth approximately Rs 3,290 crore excluding GST (goods and services tax)," it stated in an exchange filing.

"The company reported a strong set of numbers, with a strong 33 per cent year-on-year (YoY) revenue growth at Rs 1,830 crore led by robust execution while EBITDAM came in at 8.8 per cent (inclusive provision of Rs 29 crore for Elevated Bangalore metro project). Geographically wise, order book is well-diversified thereby providing a natural hedge from a slowdown in any particular business segment. With healthy Q1 execution, management has revised revenue guidance for FY24E to Rs 6,500-7,000 crore with EBITDA margin to close to double digit. FY24E capex will be at Rs 150-200 crore," Yes Securities Institutional Equities said.

For Q1 FY24, ITD's revenues grew 67 per cent YoY to Rs 1,830 crore (above our and street estimates of Rs 1,380 crore and Rs 1,470 crore). On the bottom-line front, adjusted profit after tax (PAT) came in at Rs 52.3 crore (above our estimates of Rs 40.7 crore), owing to better operating performance," it further mentioned.

We remain positive on its healthy and diversified order book; strong execution capabilities; lean balance sheet; and advanced technology, skilled labour, it added.

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On technical setup, the counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 77.04. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 25.52 against a price-to-book (P/B) value of 3.21.

The scrip has an analyst target price of Rs 213, Trendlyne data showed, suggesting a potential downside of 11 per cent. It has a one-year beta of 1.64, indicating high volatility.

ITD Cementation India is an engineering and construction company, undertaking heavy civil, infrastructure and EPC business. It has established presence and expertise in Maritime Structures, Mass Rapid Transit Systems, Airports, Hydro-Electric Power, Tunnels, Dams & Irrigation, Highways, Bridges & Flyovers, Industrial Buildings and Structures, Foundation & Specialist Engineering.

Meanwhile, Indian equity benchmarks were seen trading higher today, led by gains in metals, automobile, banks and energy stocks.

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