Dilip Buildcon Ltd. has secured a significant infrastructure contract worth ₹1,850 crore from REC Power Development and Consultancy Limited (RECPDCL). According to reports from CNBC TV18, the project involves developing a 400 kV substation at Mekhali along with associated transmission lines in Belagavi district, Karnataka. The contract has been awarded through a competitive bidding process, with RECPDCL acting as the bid process coordinator on behalf of the Government of Karnataka. The company has now received a Letter of Intent (LOI) from RECPDCL, formalizing the contract award.
The project will be executed under the Tariff-Based Competitive Bidding (TBCB) route, with Dilip Buildcon acquiring 100% equity in the project special purpose vehicle (SPV) and acting as the Transmission Service Provider (TSP). As reported by CNBC TV18, the project will be implemented on a Build-Own-Operate-Transfer (BOOT) basis with a 35-year concession period from the commercial operation date. Construction and commissioning are expected to be completed within 24 months from the effective date. The project will be executed under a tariff-based annuity model, which is commonly used in transmission infrastructure projects.
According to the exchange filing reported by CNBC TV18, the project involves comprehensive development, financing, design, engineering, procurement, construction, testing, commissioning, operation and maintenance of transmission assets. The estimated engineering, procurement and construction (EPC) value of the project is approximately ₹1,850 crore, excluding GST. Under the project scope, Dilip Buildcon will handle design, engineering, procurement, construction, testing, commissioning, financing, and long-term operation and maintenance of the transmission assets. The company clarified that the contract does not involve related party transactions and that its promoters do not have any interest in the awarding entity.
For the December quarter, Dilip Buildcon reported a net profit of ₹830 crore, compared with a profit of ₹115.3 crore in Q3FY25. As reported by CNBC TV18, the bottom line included a one-time exceptional gain of ₹585 crore, which significantly boosted the reported profitability. However, revenue fell 17.5% year-on-year to ₹2,138 crore from ₹2,590 crore in the year ago period, while EBITDA slipped 20% to ₹382 crore from ₹467 crore last year, with margins at 17.9% compared with 18.4% in the same quarter a year ago.
Following the project announcement, shares of Dilip Buildcon spiked to hit the intraday high of ₹293.40, but the stock has since pared its gains and is trading close to yesterday's closing price at ₹288.50 as of 12.53 pm. According to CNBC TV18, the shares have declined 15% in the last month despite the major contract win. The 35-year concession period is expected to provide stable annuity-based revenue visibility for the company once the project becomes operational, potentially supporting long-term financial performance.
