Moneycontrol
Jun 15, 2017 04:14 PM IST | Source: Moneycontrol.com

Buy Ashoka Buildcon; target of Rs 240: Axis Direct

Axis Direct is bullish on Ashoka Buildcon has recommended buy rating on the stock with a target price of Rs 240 in its research report dated June 12, 2017.

Buy Ashoka Buildcon; target of Rs 240: Axis Direct

Axis Direct's research report on Ashoka Buildcon


BOT collections (for existing portfolio) grew 8% YoY to Rs 2.6 bn, primarily driven by traffic growth. Excluding projects which are due to get over soon, toll collection was up 10% YoY.EPC execution maintains its trend of steady growth (up 13% in Q4 and 15% in H2). We believe the robust order book (Rs 70 bn; 3.7x FY17 EPC sales) in tandem with traction witnessed at most projects augurs well and will drive 15% EPC sales growth pa.


Outlook


EPC margin was a tad low in Q4 (10.4% vs. 12% YoY), however for the full year it was similar to FY16 levels of 12.7%. Management guided for similar level going forward. Working capital for EPC segment remains high at 29% of sales (similar to FY16). We roll forward our TP to FY19. We now have a BUY rating with TP of Rs 240.


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