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Nirmal Bang Report
Ashoka Buildcon Ltd.'s Ebitda grew by ~24% YoY (actual/estimate: Rs 1,859 million/Rs 2,363 million) and it was lower than oue estimate due to higher cost of raw materials, employees and other expenses, which grew by 49%, 26% and ~54% YoY, respectively. The management has guided for revenue growth 15% for FY25.
Ebitda margin will be in the range of 9-9.5% in FY25 and improve further to 11-11.5% by FY26-end.
Order inflows worth Rs 120-150 billion in FY25 to come from both the Central as well as State governments.
The proceeds from monetisation is to be used to give exit to SBI Macquarie and reduce debt (50% reduction in working capital debt expected).
The company prioritizes sustainable EPC business in highways, railways, power transmission and distribution. We maintain Buy on Ashoka Buildcon with a target price of Rs 220, valuing it at a price/earning of six times (assigned a higher multiple) on Dec'25E EPS and built-operate-transfer/hybrid annuity model projects on a 0.7 times price/book basis.
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