Dilip Buildcon jumps 4% after India Ratings revises outlook to ‘positive’

Shares of Dilip Buildcon rose around 4 percent on November 22 morning after India Ratings revised its outlook on the civil construction company to “positive” from “negative”. The agency also maintainined its long-term issuer ratings on fund-based and non-fund-based instruments at “IND A”.

The outlook revision reflects an improvement in Dilip Buildcon’s leverage and interest coverage ratio during the first half of FY24 and the agency’s expectation of its credit metrics.

At 12.11 pm, Dilip Buildcon was trading 1.4 percent higher from the previous close at Rs 427.95 on the National Stock Exchange (NSE). The stock has rallied 95 percent this year, outperforming the benchmark Nifty which has risen around 8.5 percent during the time.

According to analysts, Dilip Buildcon’s liquidity profile will likely remain comfortable over FY24-FY25 due to an improvement in the working capital cycle with the release of its working capital lock-up.

India Ratings said it considered Dilip Buildcon’s standalone financials while adjusting the outstanding debt of those special purpose vehicles (SPVs) for which the company has provided a corporate guarantee.

The agency continues to factor in the equity commitments of Dilip Buildcon under-construction hybrid annuity model (HAM)-based projects and mine developer and operator projects. Dilip Buildcon is also entering into a strategic tie-up for selling a 26 percent stake in the HAM assets.

There has been no major development around the Central Bureau of Investigation’s (CBI) visit to Dilip Buildcon’s premises and the residence of its executive director in Bhopal on December 31, 2021.

The company refuted all the charges and said the company’s executive director had been released from the custody of the investigating agency.

“Ind-Ra will continue to monitor the developments around the case and its impact on Dilip Buildcon’s credit risk profile,” India Ratings said.

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