Buy Ashoka Buildcon; target of Rs 220: ICICI Securities

ICICI Securities is bullish on Ashoka Buildcon has recommended buy rating on the stock with a target price of Rs 220 in its research report dated August 13, 2025.

Broker Research

August 20, 2025 / 10:48 IST

BUY

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securities's research report on Ashoka Buildcon

Ashoka Buildcon (Ashoka) reported a weak Q1FY26 with execution impacted amid early monsoons. As a result, revenue came in at INR 13bn (-30% YoY), its lowest in the last 10 quarters. That said, EBITDA margins expanded to 9.3% (+290bps YoY), albeit with a lower PAT of INR 0.3bn (-25% YoY). Management sees Q2 similar Q1, while execution to pick up in H2FY26.Its guidance of 10% revenue growth for FY26 is likely to encounter some stress, in our view. Hence, we revise our earnings. In more favourable light, its OB is steady at INR 159bn (+15% YoY) with a promising order pipeline of INR 3.4trn from NHAI (INR 0.8trn near-term visibility). Deals should see completion by Sep’26E, enabling net cash inflow of ~INR 15bn; thus,allowing debt levels to ebb. The stock is trading at 8x EV/EBITDA (2-year forward) vs. its historical average ~10x. We retain BUY; TP revised to INR 220 on inexpensive valuations

Outlook

We maintain BUY with a revised TP of INR 220 (vs. INR 259), primarily on the back of cheaper valuations and potential near-term cash flows.

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