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Cancellation of around Rs 1,900-crore worth of hydro power project, has lent a negative note to market interest in the stock of Hindustan Construction Ltd (HCC).

The stock has been trading flat over the past one week, ending at Rs 146.25 on the BSE on Thursday . Total traded quantity was around 5,73,931. HCC had bagged construction of a 1200-MW Sawlakote hydel power plant in Jammu and Kashmir, at a total cost of Rs 4,300 crore on turnkey basis.

However early this month, the Jammu & Kashmir Government suggested the project be re-awarded on global tendering basis against the negotiated award route adopted earlier. The order accounted for 19.6 per cent of HCC order book.

Analysts, however, maintain that this is unlikely to impact financials for FY07 and FY08, as the execution of the order was to be spread over 7.5 years. The company's March 2007 order book is also expected to increase to around Rs 9,800-10,000 crore, as it is likely to bag several projects in hydro power over the next 3-4 months.

Deeptha Rajkumar

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