Shares of infrastructure company RPP Infra Projects witnessed a sharp rally during Wednesday's trading session, December 3, climbing as much as 8% to reach ₹115.60 per share. The surge was fueled by the company's announcement of a fresh contract win, injecting optimism among investors.
Details of the New Contract Win
The catalyst for the stock movement was a regulatory filing made after market hours on Tuesday. RPP Infra Projects disclosed that it secured a ₹26 crore order from the Office of the Superintending Engineer (Highways) Construction and Maintenance, Tiruvannamalai Circle, Tamil Nadu. The project involves widening the Hogenakkal–Pennagaram–Dharmapuri–Thirupathur Road (SH-60) from two lanes to four lanes, with a strict completion timeline of 12 months.
The company was quick to add crucial clarifications. It stated that neither its promoters nor promoter group companies have any interest in the entity that awarded this order. It further confirmed that the contract does not qualify as a related-party transaction, ensuring transparency for its shareholders.
Strengthening Order Book and Recent Wins
This Tamil Nadu project marks the company's second significant order win within a short span. Just last week, RPP Infra bagged a larger ₹69.36 crore contract from the Office of the Superintending Engineer, Chennai Circle. That order is for widening and improving the Thirumazhisai–Uthukottai Road (SH-50).
Looking further back, in September, the company won a ₹134.21 crore order from the Maharashtra State Infrastructure Development Corporation (MSIDC) for road improvement works in Raigad district. These consecutive wins have substantially bolstered the company's project pipeline.
In its Q2 earnings report, RPP Infra Projects revealed that its current order book consists of 43 projects with an outstanding value of ₹3,874 crore yet to be executed. Out of this total, new orders worth ₹1,851 crore, awarded during the current year, are still in their initial stages. The management has emphasized its focus on commencing these projects at the earliest.
Stock Performance Under Pressure
Despite the positive news, the stock failed to hold its early gains completely. By 11:45 a.m., it had pared most of the rally and was trading only 1.50% higher at ₹108.90. This volatility highlights the underlying pressure the stock has been facing.
RPP Infra's share price has fallen 57% from its December 2024 highs of ₹255.30 per share. In the current calendar year alone, the stock has shed 45% of its value, marking its most significant yearly decline since 2018. However, the long-term perspective offers some solace; the stock has delivered gains of 168% over three years and 136% over five years.
Regarding shareholding, data from the September quarter shows that retail investors hold a majority stake of 60.7%, while promoters own the remaining 39.2%.
Disclaimer: Investors are advised to consult certified financial experts before making any investment decisions.
