Shares of infrastructure firm RPP Infra Projects are likely to attract investor attention on Wednesday, December 3, following the announcement of a fresh contract win. The company has secured a significant order from a Tamil Nadu government body, marking its second major project award within a week.
Details of the New Tamil Nadu Highway Project
In a regulatory filing made on Tuesday, RPP Infra Projects disclosed that it has been awarded a contract worth ₹26 crore. The order was issued by the Office of the Superintending Engineer (Highways) Construction and Maintenance, Tiruvannamalai Circle, Tamil Nadu.
The project involves the widening of the Hogenakkal–Pennagaram–Dharmapuri–Thirupathur Road (SH-60) from its current two lanes to four lanes. The company has been given a timeframe of 12 months to complete the construction work.
RPP Infra clarified important governance aspects, stating 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 constitute a related-party transaction.
Back-to-Back Order Wins Strengthen Order Book
This latest award comes close on the heels of another major win for the company. Just last week, RPP Infra secured a larger contract worth ₹69.36 crore from the Office of the Superintending Engineer, Chennai Circle, Anna Salai. That project is for widening and improving the Thirumazhisai–Uthukottai Road (SH-50) from two to four lanes.
These new additions contribute to the company's robust order pipeline. In its Q2 earnings report, RPP Infra Projects stated, “Our current order book as of date consists of 43 projects with an outstanding order value of ₹3,874 crore yet to be executed.”
Out of this total order book of ₹3,874.04 crore, new orders worth ₹1,851 crore awarded during the current financial year are still in their initial stages. The company's management has emphasized its focus on commencing work on these projects at the earliest.
Stock Performance: Short-Term Pressure vs. Long-Term Gains
The recent order wins come at a time when the company's shares have faced significant selling pressure. Since August 2024, the stock has witnessed a sharp correction, falling from around ₹217 to a latest closing price of ₹107.30. This represents a decline of over 50% in a few months.
In the current calendar year alone, the shares have lost 45% of their value, marking the company's most substantial yearly drop since 2018 when it fell 57%.
However, despite the severe short-term pressure, the stock's long-term performance tells a different story. Over a three-year period, the shares are still trading 168% higher, and over five years, they maintain a gain of 136%. Investors will be watching to see if the new order inflows can help reverse the recent downtrend.
