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Nirmal Bang Report
Overall Ashoka Buildcon Ltd.'s revenues (actual/estimate: Rs 21,335 million/ Rs 16,557 million) and Ebitda (act/estimate: Rs 1,765 million/ Rs 1,676 million) grew by ~37% YoY and ~36% YoY, respectively, despite higher operating expenses - ~36% YoY.
Strong order book to the tune of Rs 132 billion (road hybrid annuity model: 9%, road engineering, procurement and construction: 34%, power transmission and distribution: 42%, railways: 9, and EPC – building and city gas distributors: 6%). It has placed a bid for Rs 130 billion more worth of projects. Our estimate is hoping that the projects will be awarded before the code of conduct is implemented.
We are revisiting estimates after the site visit and interaction with Ashoka Buildcon to 'Buy' with a target price of Rs 218 based on a earning price of 6 times (assigned a higher multiple) on December 25E earning per share and built-operate-transfer/HAM projects on 0.7 times price/book basis
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