Shares of Dilip Buildcon have seen renewed enthusiasm amid a flood of road repair orders over the past few days as shares rallied on December 19.

On Thursday and Friday, the company said it had received four orders worth Rs 6,167 crore to build roads in Karnataka, Jharkhand, Chhattisgarh and Telangana. The stock was trading at Rs 238, up nearly 4% in morning trade.

The largest of these orders is for the construction of the four-lane Urga-Pathalgaon road section NH-130A under Bharatmala Pariyojana in Chhattisgarh worth Rs 1,955 crore. The company needs to complete it within 30 months.

Next is the development of a six-lane Maradgi S Andola to Baswantpur (Package-lll of Akkalkot-KNT/TS Border) in Karnataka worth Rs 1,589 crore. It also has a 30-month completion period. Four lanes on the Karimnagar-Warangal section of NH-563 and four lanes on Mehgama-Hansdiha in Jharkhand are two other orders.

While analysts cut their forecasts for future highway capital spending, they are mainly bullish on the stock. Geojit Financial Services expects to commence execution in the second half of FY23 due to increased inflows and the completion of legacy projects.

It is upgraded to Buy from Neutral on an expected margin recovery, valuing Dilip Buildcon at 11x FY24E earnings. It has a target price of Rs 284.

Company management expects margins to improve further as 95% of legacy orders have been executed in H1FY23 and guides for FY23 margins of 12% to 13%.

HDFC Securities said it has recalibrated our EPS forecast higher to account for margin recovery, strong order growth and debt reduction. “As we revise our estimates, we maintain our Buy rating with a component-based aggregate price target of Rs 340 per share (12x September 24 EPS).