Afcons Infrastructure shares jump 10% in early trade; here's why

Shares of Afcons Infrastructure Ltd surged 9.68 per cent to hit a high of Rs 346.30 in Wednesday's early trading session. The stock recorded heavy trading volume along with the price action, as around 8.72 lakh shares were last seen changing hands on BSE. The figure was significantly higher than the two-week average volume of 54,000 shares. Turnover on the counter stood at Rs 29.67 crore, commanding a market capitalisation (m-cap) of Rs 12,333.66 crore.

Today's sharp upmove came after the company announced it has received the Letter of Award from the Vadhvan Port Project Ltd (VPPL) for the construction of a 10.14 km-long breakwater at the upcoming Vadhvan Port in Maharashtra.

"The project award value is Rs 5,301 crores. This, when completed, will be the second-longest breakwater in the world," Afcons stated.

Krishnamurthy Subramanian, Executive Chairman at Afcons, said, "This award is a testament to Afcons' proven expertise in delivering complex and large-scale marine infrastructure projects. The Vadhvan breakwater project will be a strategic enabler for India’s ambition to become a global maritime hub."

The company highlighted that Vadhvan Port will have a handling capacity of 23.2 million TEUs, positioning India prominently on the global trade map.

On the technical front, the stock was trading above its 5-day, 10-day, 20-day, 30-day, 50-day and 100-day simple moving averages (SMAs), but remained below the 150-day and 200-day SMAs. Its 14-day relative strength index (RSI) stood at 42.46. An RSI below 30 is considered oversold, while a reading above 70 is viewed as overbought.

According to Trendlyne data, Afcons has a standalone/consolidated price-to-earnings (P/E) ratio of 66.11/48.97 and a price-to-book (P/B) value of 3.74. Earnings per share (EPS) stood at 5.05/6.82, while return on equity (RoE) was 5.66. The stock's one-year beta was 0.77, indicating relatively low volatility.

Virat Jagad, Senior Technical Research Analyst at Bonanza, "After witnessing a sharp correction from Rs 470 to around Rs 280 level, the stock has formed a base and is attempting a recovery. The stock remains below the falling channel resistance and the 200-day moving average near Rs 360, which continues to cap upside potential. A decisive breakout above the Rs 340–345 zone could strengthen bullish sentiment and pave the way for a move towards Rs 360-385. On the downside, Rs 320 remains an important support level, and a breach below it may trigger renewed selling pressure towards Rs 300. Overall, the near-term outlook has improved, but a confirmed breakout above channel resistance is required to signal a meaningful trend reversal."

Afcons Infrastructure is the flagship infrastructure engineering and construction company of the Shapoorji Pallonji Group.