This Rs 1,100-crore m-cap firm bags order worth Rs 949 crore; stock jumps 10%

What happened

Jyoti Structures Ltd won orders worth Rs 949.35 crore from Power Grid Corporation of India for transmission lines in Rajasthan, and its stock settled at Rs 9.01 per share on the NSE, up 10.42 per cent. The company's market capitalisation is Rs 1,075.49 crore.

Confirmed

Global impact / market context

The order is almost as large as the company's entire market value, so it could significantly lift future revenue for this engineering, procurement and construction (EPC) firm, which means a company that builds projects on a turnkey basis. Investors pushed the stock up 10.42 per cent on the news.

Analyst inference

The award shows state-owned Power Grid is spending on high-voltage direct current (HVDC) transmission lines in Rajasthan, which means large power links that carry electricity over long distances. It follows a Rs 689.93-crore contract from Gujarat Energy Transmission Corporation for a Gujarat transmission line, suggesting a steady flow of power-infrastructure orders.

Analyst inference

What to watch

1. Both packages have a completion period of 38 months from the date of the respective notifications of award, so execution will run over several years. Confirmed
2. Because the combined order value is Rs 949.35 crore excluding GST, investors may watch how much revenue and profit per sale Jyoti Structures actually books as work progresses. Analyst inference
3. The company is an EPC contractor, which means it supplies, erects, tests and commissions transmission lines; funding this work could require working capital, which means cash tied up before payments arrive. Analyst inference

Evidence

• Original source link unavailable