₹5,000 Cr NALCO Contract: Infra stock wins mining contract for 25yrs

Synopsis: The shares of this small-cap construction company were in focus after being announced as the L1 bidder by NALCO for a mining contract worth Rs 5,000 crore for a period of 25 years. 

This company, which is presently in the business of development of infrastructure facilities on an Engineering, Procurement, and Construction basis (EPC) and undertakes contracts from various governments and other parties and special purpose vehicles promoted by the company, has its shares in the spotlight after being declared as the contract winner. 

With the market cap of Rs 7,342 crore, the shares of Dilip Buildcon Ltd had hit their intraday high at Rs 477.90, rising by about 4 per cent compared to their previous day closing price of Rs 461.15. The shares are trading at a PE of 16.9, whereas its industry PE is at 18.2, and have given an all-time return of 85%. 

About the Contract. 

Dilip Buildcon has landed a major long-term project from NALCO, a Government of India enterprise, giving the company a strong boost in its mining and infrastructure portfolio. The Letter of Award covers the development and operation of the Pottangi Bauxite Mines, along with building the Overland Conveyor Corridor (OLCC) and other supporting facilities, making it one of the company’s most significant assignments in recent years.

The contract is worth Rs 5,000 crore and will run for an extensive 25-year period, providing the company with years of steady project visibility. The first three years, valued at Rs 1,750 crore, focus on EPC work that includes the OLCC, roads, water intake systems, and initial mining for 7 million tonnes of ore. After that, the next 22 years are dedicated to mining operations for 77 million tonnes, with the value calculated at current mining charges of Rs 423 per tonne, adding up to Rs 3,250 crore.

This win strengthens Dilip Buildcon’s position in the Mine Developer and Operator (MDO) space, a segment known for its long-term, high-value contracts. Securing such a large domestic project from a PSU not only boosts the company’s order book but also reinforces confidence in its ability to handle complex mining and infrastructure work. With a 25-year tenure, the project adds stability, long-term revenue, and strategic depth to DBL’s business.

Financials and more. 

The revenue from operations for the company stands at Rs 1,926 crores in Q2 FY26 compared to Q2 FY25 revenue of Rs 2,497 crores, falling by about 23 per cent YoY. Similarly, the net profit stood at Rs 214 crore in Q2 FY26, down from Rs 266 crore in Q2 FY25, giving a fall of about 20 per cent. 

Dilip Buildcon’s order book of Rs 18,610 crore shows a healthy and well-spread mix of projects, led by major contributions from irrigation at Rs 4,819 crore, mining at Rs 4,087 crore, and roads at Rs 2,609 crore, while other segments like metro, bridges, tunnels, renewable energy, optical fibre, and water supply add further depth. Most of this pipeline is about 75%, which comes from EPC projects, with the remaining 25% from HAM contracts, giving the company a balanced blend of execution-driven and annuity-style revenues. 

Alongside this, DBL continues to benefit from long-term MDO contracts spanning 25 to 55 years and has recently added Rs 3,300 crore worth of 3-year mining orders worth Rs 1,318 crore from Pachhwara and Rs 1,982 crore from DBL Sirmaul by collectively reinforcing the company’s strong visibility and diversified growth outlook.

Dilip Buildcon (DBL) has positioned itself as a key force in India’s infrastructure transformation, aligning closely with the country’s push for better roads, power facilities, dams, and modern public assets. As a rapidly growing EPC company, DBL is known for its strong execution capabilities and engineering expertise, which enable it to deliver large and complex projects efficiently.

The company continues to tap into emerging opportunities created by India’s development momentum, demonstrating agility and a forward-looking approach. With its focus on quality, innovation, and sustainability, DBL isn’t just contributing to the nation’s infrastructure growth—it is actively helping shape the foundation of a more connected and future-ready “New India”.

Written by Leon Mendonca. 

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