Buy Ashoka Buildcon; target of Rs 175: Motilal Oswal

Motilal Oswal’s research report on Ashoka Buildcon

ASBL’s standalone revenue grew 62% YoY to INR10.7b in 3QFY19, beating our estimate of INR8.6b. Sales were supported by better-than-estimated execution of projects in hand. Construction revenue grow 66% YoY supported by strong growth in the power T&D segment (+94% YoY to INR2.5b). EBIDTA grew 99% YoY to INR1.5b, ahead of our estimate of INR1.0b, with margin improvement of 265bp to 14.0% from 11.3% in the year-ago period. Reported profit stood at INR622m (+32% YoY) below our estimate of INR700m. During the quarter, ASBL provided for INR398m towards its exposure to GVR Infra (total exposure at INR806m); adjusting for this PAT stood at INR895m (+91% YoY).

Outlook

We maintain our Buy rating with SOTP-based TP of INR175.

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First Published on Feb 1, 2019 02:07 pm

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