IDBI Capital appeared neutral on IRCON's annual outlook after the company delivered a mixed bag performance in its first quarter earnings, last week.

What Happened: The rail company reported a 9% increase in standalone net profit, reaching ₹176.51 crore, but revenue from operations declined by 17%, coming in at ₹2,180.48 crore. EBITDA for the quarter was ₹246 crore, marking a 3.2% increase compared to ₹238 crore in the June quarter of 2023, with an EBITDA margin of 10.8%. 

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IDBI said that the company's profit after tax fell in line with its estimates. It also noted a weakening trend in new orders wins. IRCON’s order book declined to ₹26,034 crore at the end of June 30.

Out of this ₹20,420 crore is from the railways segment, ₹5,531 crore from highways, and ₹83 crore from other projects, the company said in its press release. This marked a decrease from the ₹27,208 crore order book reported at the end of March 2024 and could potentially affect revenue margins for FY25 and FY26, IDBI Capital noted.

IRCON expects revenue to have flat growth in FY25. It has landed multiple projects and expects an order inflow of ₹4,000 crore-₹5,000 crore in the near term.

The brokerage also noted that opportunities remain big for the railway major as more orders are in the pipeline. IDBI Capital had a "hold" rating on the stock, with a stock price of ₹272. 

Price Action: IRCON was trading 0.59% higher at ₹273.70 on Tuesday.

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