Gammon India plunges as its flyover crumbles

Shares of Gammon India plunged 9% to Rs 420.65 on the Bombay Stock Exchange, post the flyover collapse in Hyderabad on Sunday evening.

The market perceives that the collapse of the flyover will result in huge losses for the company and affect the company’s ability to secure new contracts. Around 8.37 lakh shares exchanged hands on BSE on Monday.

However, analysts believe all is not lost. If it were to recover from the flyover muddle, Gammon still has the quality to do well on the bourses. The order book of the company provides strong growth visibility.

An order book at “3.6 times FY3/07” revenues provides strong visibility for growth over the next three years. With the initial mobilisation phase for a large proportion of the order book over, margins should remain stable, a construction analyst said.