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This Top Infrastructure Company Stock Is Down 45% From Highs, Should You Buy?

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Dilip Buildcon has over the last decade or so, emerged among the top infrastructure companies. It has projects across the spectrum, including highways, rails and metro, mining, irrigation, tunnels, special bridges and urban development.

 

Stock down 45% from 52-week highs

Stock down 45% from 52-week highs

Dilip Buildcon has seen its shares drop from levels of Rs 750 to the current market price of Rs 410. This has largely to do with the quarterly numbers of the company, which has dragged the price of the stock lower. This comes at a time when most stocks are rallying and the Sensex has now reached almost 61,500 points once again. So, let's try and analyse what is ailing the stock of Dilip Buildcon a truly large player in the infra space.

Poor quarterly numbers
 

Poor quarterly numbers

The quarterly numbers of Dilip Buildcon for the second quarter ending Sept 30, 2021 can at best be described as poor. The company recorded a consolidated net loss of Rs 441.42 crore in the quarter ended September 2021 as against net profit of Rs 17.19 crore during the

The EBIT margins were down to 10.56% for the second quarter of FY 2022, as against a solid 15.89% for the previous quarter. Rising inputs costs have no doubt added to a compression in margins for the company and we do not see a recovery anytime soon.

Should you buy the stock of Dilip Buildcon?

Should you buy the stock of Dilip Buildcon?

The stock of Dilip Buildcon is still trading way below its 200-day moving averages of Rs 510, with the share stuck at Rs 410. There is clearly a bearish signal in the stock. One is not sure whether the company would return to profitability in the December quarter. Unless that happens its hard to arrive at any kind of fundamental analysis. There is nothing interesting happening in the stock at the moment and one needs to wait for the quarterly numbers. Apart from this the Sensex is also above the 61,000 points mark, making stocks in general unattractive.

There are many other stocks we believe are attractive and we have been recommending to buy these stocks in small quantities. We do not advocate any lumpsum investment at the moment as stocks are over priced and it is difficult to find value.

Disclaimer

Disclaimer

Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article. Investing in equities is risky. The author and his family do now own any shares of Bajaj Auto.

Read more about: stocks to buy
Story first published: Thursday, January 13, 2022, 10:00 [IST]
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