Gamuda Bhd' joint venture (JV) with Ferrovial Construction for the Oven Mountain Pumped Hydro (OMPH) project in New South Wales, Australia, has prompted two research houses, RHB Investment Bank Bhd (RHB Research) and MIDF Amanah Investment Bank Bhd (MIDF Research), to issue a BUY recommendation on the construction company.

The OMPH project marks Gamuda's first entry into hydro power generation, aligning with its strategy to build a two-gigawatt renewable energy (RE) portfolio in Australia over the next five years.

Both RHB Research and MIDF Research see the Early Contractor Involvement (ECI) role which Gamuda has secured as a strategic entry into the RE sector, underscoring Gamuda's growth potential in Australia.

Both research houses set a target price ranging between RM9.64 and RM10.52, implying a total expected return of 9.9% and 18% respectively.

Gamuda's ECI role in the OMPH project involves initial design and planning activities, as well as addressing environmental and land acquisition considerations. The project is estimated to be worth A$1.5 billion (RM4.35 billion), with Gamuda's potential share valued at approximately RM2.18 billion.

The JV's successful completion of the ECI package enhances its chances of winning the larger engineering, procurement, construction and commissioning contract, expected to be awarded by the fourth quarter of 2025, pending necessary approvals.

Gamuda's current order book stands at RM31.4 billion and the company is on track to reach RM35 billion by year-end, with projections to expand this to RM40-RM45 billion by 2025, supported by a robust portfolio in both traditional infrastructure and renewable energy projects across Australia.

Citing its strategic international expansion and consistent wins in mega-project tenders, analysts continue to favour Gamuda as it solidified its position as a key player in the Malaysian construction sector.