Hindustan Construction Company (HCC) and Tata Projects Limited (TPL), in a 50:50 joint venture, have secured a substantial contract worth ₹2,470 crore from Tata Power Company for the construction of the Bhivpuri Off-Stream Open-Loop Pumped Storage Project (PSP) located in Karjat, Maharashtra. On March 21, 2025, HCC's shares experienced a significant surge, climbing 13.01% to reach ₹27.80 per share following the announcement of this lucrative deal, which marks a significant milestone for the company amidst its recent financial struggles.
The Bhivpuri project, which is set to provide an impressive 1000 MW capacity (with configurations of 2x333 MW and 2x167 MW), is an essential part of HCC's ongoing initiatives to contribute to India’s growing hydropower infrastructure. The regulatory filing detailed the comprehensive scope of work which includes civil and hydro-mechanical components. This involves constructing a coffer dam, an intake structure with gates and screens at the existing upper reservoir at Thokerwadi, head race tunnels, penstocks, surge shafts, pressure shafts, a powerhouse, tail race tunnels, as well as lower intake structures. Furthermore, it includes the establishment of a new lower reservoir complete with a GFRD dam alongside various balance-of-plant (BOP) foundations and buildings required for project completion.
HCC's dedication to hydropower is evident as the firm currently executes five hydroelectric power projects across the country, which also includes the renowned 1000 MW Tehri Pumped Storage System in Uttarakhand. This latest win not only solidifies HCC's reputation as a key player in hydropower projects but also demonstrates their significant engineering capabilities as they have helped develop nearly 26% of India’s installed hydropower capacity. “HCC has served the nation in the development of nearly 26% of installed hydropower capacity,” the company stated in a previous regulatory note.
Despite the financial turbulence leading up to this announcement, shares of HCC showed resilience, recovering from a severe sell-off that resulted in nearly a 51% decrease in stock value between August 2024 and February 2025. As of March 20, 2025, HCC shares settled at ₹24.55 apiece, down 2.31% on the National Stock Exchange. The sharp rebound in share price can be seen as a response to the positive market sentiment generated by the contract award.
The joint venture's achievement is a welcome change for HCC, particularly in light of its recent financial reports. The company reported a consolidated net loss of ₹38.92 crore in Q3 December 2024, plunging from a net profit of ₹182.30 crore recorded in Q3 December 2023. The net sales also fell by 31.72% year-on-year, amounting to ₹1,006.81 crore in Q3 FY25. In the broader context of the stock market, HCC's recent performances were after hitting a 52-week low of ₹21.97 on March 3, 2025, and despite climbing higher this week, the company still shows a year-to-date decline of 35.03%.
As of March 21, 2025, HCC holds a significant market capitalization of approximately ₹4,466.59 crore on the National Stock Exchange. The company has a distinct historical legacy in infrastructure with active contributions to both nuclear and hydropower sectors, having constructed 60% of India’s nuclear power generation capacities alongside its extensive highway and expressway network.
Technically, the stock of HCC performed favorably against its short-term moving averages, trading higher than the 5-day, 10-day, and 20-day simple moving averages (SMAs), yet it continued to lag behind the longer-term averages, such as the 30-day, 50-day, 100-day, 150-day, and 200-day SMAs. The stock’s 14-day relative strength index (RSI) measured at 44.63, indicating that it is in proximity to oversold territory. Its price-to-equity (P/E) ratio remains concerning at 42.41 when viewed against a price-to-book (P/B) value of 3.35 and an earnings per share (EPS) measuring at (-)0.58, compounded with a return on equity (RoE) of (-)7.83.
The implications of such a large-scale order extend beyond immediate financial returns—as HCC continues to steer itself back towards profitability, these projects could significantly enhance investor confidence and market perceptions of sustainability in the construction sector. Overall, this week has marked a pivotal moment for HCC, reflecting not only its operational capabilities but also its potential to drive growth in India's energy landscape.
This joint venture win adds to the momentum HCC is gaining, particularly as it recently secured another ₹2,191 crore order for a separate metro project with the Madhya Pradesh Metro Rail Corporation, showcasing a robust pipeline of work across critical infrastructure.
As the construction industry in India gears up for further growth, HCC appears well-positioned to leverage its extensive experience and technical expertise to capitalize on emerging opportunities in the hydropower sector and beyond.
