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Budimex is the leading Polish company in the construction sector, accounting for about 57% of the overall WIG-construction index. Thanks to the diversification of its operations, the company has been able to occupy such a large share of the market.
Over the past few years, the company has been slowly withdrawing from the residential construction segment, for which demand dropped significantly when it became clear that the Polish government would not introduce another housing subsidy program. The company has instead increased its presence in the railroad construction sector, among others.
The company plans to expand its operations in the municipal waste sector in the coming years, both through the development of its own brand, FBSerwis, and through the potential acquisition of another company in this sector.
Budimex also plans to increase its presence in foreign markets, as currently more than 95% of its revenues come from the Polish market. This will undoubtedly be helped by participation in a consortium that will handle the construction of a 230-kilometer section of the Rail Baltica railroad line in Latvia, which is one of the largest European infrastructure projects in this part of Europe. Undoubtedly, Budimex has secured a fantastic entry into the Latvian market. Participation in such a huge project will significantly affect the company's visibility throughout Europe.
As for the Polish market, the company faces the prospect of huge tenders from Polish road (GDDKiA) and rail (PKP PLK) infrastructure managers. Money is flowing into Poland from the European Union as part of Poland's National Recovery and Resilience Plan. They are to be allocated, among other things, to infrastructure development, which Budimex is sure to benefit from, given its experience in the market and its ability to execute contracts.
Personally, I think the company is a bit overvalued. Companies in the construction sector have always been very popular among Polish individual investors. Nevertheless, it is a well-managed company whose future is definitely bright.

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The user Phetuvov holds no position in WSE:BDX. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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