Dilip Buildcon shares rallied over 12% in Thursday's trading session, touching an intraday high of ₹439.90, following the company's successful bid and receipt of a Letter of Intent (LoI) for the grant of authorisation to lay, build, operate or expand an LPG pipeline from Paradip in Odisha to Raipur in Chhattisgarh. As per Goodreturns, the stock had previously closed at ₹404.95 on BSE, up 3.2% with a market cap of ₹6,578.20 crore as investors booked profits of the early session. The strong market response comes after the company announced on Wednesday (September 9) that it had received the LOI from the Petroleum and Natural Gas Regulatory Board (PNGRB) for the development of this strategic pipeline project. The stock had previously closed at ₹393 on Wednesday, demonstrating sustained investor confidence in the pipeline's strategic value.
Infrastructure company Dilip Buildcon Ltd announced on Wednesday (September 9) that it has received a Letter of Intent (LOI) from the Petroleum and Natural Gas Regulatory Board (PNGRB) for the development of an LPG pipeline from Paradip, Odisha to Raipur, Chhattisgarh. According to Goodreturns, the total value of this contract is ₹1,800 crore (excluding GST), with the project being implemented through a 100%-owned special purpose vehicle (SPV) in which Dilip Buildcon will hold 100% equity. The project entails the grant of an exclusive license by PNGRB to act as the authorized entity for the development of pipeline infrastructure for the transportation of LPG, including financing, construction, and operation of the same, and to levy and collect tariff for the transportation of LPG up to the designated delivery point for operation period of 25 years after construction period of 3 years. The Engineering, Procurement and Construction (EPC) works are proposed to be awarded to DBL, representing a business opportunity for the company.
As reported by Goodreturns, the construction is scheduled over 36 months following the LOI, with the project including financing, construction and operation of the pipeline, with the operation period extending for 25 years after the three-year construction period. Under the Letter of Intent, PNGRB will grant an exclusive licence to the authorised entity for the laying, building, operating or expanding the petroleum and petroleum product pipeline for transportation of liquefied petroleum gas (LPG). The pipeline will facilitate the transportation of LPG to the bottling plants of various Oil Marketing Companies (OMCs). According to the company's regulatory filing, the proposed pipeline infrastructure is expected to facilitate the transportation of LPG to the bottling plants of various oil marketing companies, thereby intending to replace the existing road-based transportation of LPG through tankers and enhancing road safety. The pipeline may also be operated as a common carrier under the applicable PNGRB framework, allowing eligible OMCs and other users to access its capacity.
According to Goodreturns, the project will generate revenue through the applicable Petroleum and Petroleum Products Pipeline Transportation Tariff for LPG transportation. The pipeline is also proposed to operate as a Common Carrier, allowing eligible OMCs and users to access the pipeline capacity under the applicable PNGRB framework. Dilip Buildcon confirmed that it will not be engaged in the procurement, trading, distribution or sale of LPG, and will not bear the associated commercial risks relating to LPG procurement and marketing. Its role through the SPV will be to develop and operate the pipeline infrastructure and provide transportation services. As per the company's regulatory filing, the project will generate revenue through the applicable Petroleum and Petroleum Products Pipeline Transportation Tariff for transportation of LPG through the pipeline, and Dilip Buildcon will undertake the design, finance, development, construction, operation and maintenance of the proposed LPG pipeline infrastructure, subject to applicable approvals, authorisations and regulatory requirements of PNGRB.
In an exchange filing dated September 10, Dilip Buildcon announced the execution of definitive agreements for divestment of its stake in Mekhali Power Transmission Limited, a special purpose vehicle developing the company's under-construction power transmission project. The stake will be sold to Alpha Alternatives Fund Advisors LLP and/or its affiliates or funds managed by the firm. The transmission project has an estimated total cost of approximately ₹2,171 crore and is developing a 400-kilovolt substation power transmission project spanning around 470 circuit kilometres in Belagavi district, Karnataka. According to Goodreturns, Mekhali Power Transmission Limited is engaged in developing, designing, and engineering a 400-kilovolt sub-station power transmission project extending to approximately 470 circuit kilometers situated in Belagavi District, Karnataka. Devendra Jain, Managing Director & CEO, Dilip Buildcon, stated that this transaction execution marks an important milestone in their DBL 2.0 journey as they build a multi-assets infrastructure platform anchored by long-duration, contracted assets. The company emphasized that the contract has been awarded by PNGRB, a domestic entity, and that the promoter and promoter group companies have no interest in the entity awarding the contract, and the project does not fall under related-party transactions.
Dilip Buildcon's strong market response reflects investor confidence in the strategic pipeline project, with shares gaining over 12% following the announcement. As per Goodreturns, the stock had previously closed at ₹404.95 on BSE, up 3.2% with a market cap of ₹6,578.20 crore as investors booked profits of the early session. The ₹1,800 crore LOI represents approximately 73.5% of the company's average quarterly revenue of ₹2,449.80 crore, as reported by CNBC TV18. The total disclosed order book stands at ₹3,540.92 crore (sum of the 6 orders disclosed across the last 3 fiscal quarters), providing 1.45 quarters of backlog coverage. Recent order inflow has accelerated significantly, with total order inflow of ₹3,004.92 crore in Q2FY27 compared to ₹536 crore in Q1FY27. However, the company's recent financial performance shows challenges, with consolidated net profit declining 50.67% to ₹112.95 crore on a 9.26% fall in revenue to ₹2,377.78 crore in Q1 FY27 compared with Q1 FY26, as reported by Business Standard. The consensus recommendation from 5 analysts for Dilip Buildcon is BUY, with an average target price of ₹515.60 for 12 months, signaling a potential 26.5% upside ahead.
