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Last Updated : Aug 17, 2018 03:10 PM IST | Source: Moneycontrol.com

Analysts bullish on Dilip Buildcon, expect up to 60% return after strong Q1

Credit Suisse has maintained Outperform rating on Dilip Buildcon as it expects revenue/EBITDA CAGR of 20 percent over FY18-20.

 
 
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Dilip Buildcon continued to trade higher on Friday as brokerage houses remained bullish on the stock and expect it to return upto 61 percent over a period of one year after June quarter earnings.

The stock price gained 2 percent intraday today on top of a percent gain seen in the previous session. At 14:42 hours IST, it was quoting at Rs 855, up 0.31 percent on the BSE.

The company has reported strong set of earnings for the quarter with profit more than doubling to Rs 255.5 crore compared to Rs 122.2 crore in same period last year.

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Revenue from operations grew by 46.4 percent to Rs 2,436.3 crore against Rs 1,664.1 crore in corresponding quarter of last fiscal.

EBITDA (earnings before interest, tax, depreciation and amortisation) shot up 44.1 percent year-on-year to Rs 432 crore, but margin contracted by 20 basis points to 17.8 percent in Q1FY19.

Dilip Buildcon said its orderbook increased to Rs 24,090.3 crore which includes 93 percent from road, highways and bridges segment, compared to Rs 23,888.1 crore in same period last year.

Here are views from brokerage houses on the road developer's earnings:

Brokerage: IIFL Wealth Research | Rating: Buy | Target: Rs 1,130 | Return: 33%

Dilip Buildcon (DBL) reported yet another solid performance during Q1 FY19 with topline growth of 46 percent YoY. Also, the company has maintained its superior margin profile of 18 percent.

Muted depreciation and interest cost has translated into doubling of bottom-line on YoY basis. The Working capital for DBL has improved to 85 days from nearly 120 days a year ago.

The Company is on track to close its deal with Shrem Group and expects to receive the balance payment by FY19 end.

DBL would require to infuse equity of around Rs 1,300 crore over next 3 years for its HAM projects. This would be funded by internal accruals and proceeds received from the asset sale to Shrem Group.

Post Q1 FY19, DBL has also won a 55-year Coal Mining project which would start contributing to the topline from second half of FY20 onwards.

With robust order book, we expect DBL to deliver 25 percent topline growth during FY18-20E. The operating margins are likely to remain healthy at 18 percent levels. At the CMP, DBL trades at an attractive valuation of 11x FY20E P/E. We assign a Buy rating with target price of Rs 1,130 per share (based on SOTP valuation).

Brokerage: Dolat Capital | Rating: Buy | Target: Rs 1,372 | Return: 61%

We broadly maintain revenue, EBITDA margin and adjusted PAT estimates for FY19E and FY20E.

We expect DBL to witness traction in revenue, best EBITDA margin among peers, superior net profit margin, comfortable working capital, robust order inflow and order book, declining leverage, and improving healthy return ratios (RoE/ RoCE of 26.1/ 27.3 percent by FY20E) over FY18-20E. Thus, we reiterate Buy on the stock with an upward revised SOTP of Rs 1,372.

Brokerage: Kotak Institutional Equities | Rating: Buy | Target: Rs 1,230 | Return: 44%

The brokerage house has maintained its Buy call on the stock with a target price at Rs 1,230 per share following increase in earnings estimates by 1-3 percent for FY19-21 but reduced order inflow estimates to Rs 12,000 crore.

Dilip Buildcon revealed good progress made on related HAM projects. Execution prowess would help it grow market share while normalising capex intensity & working cap will yield deleveraging benefits.

Brokerage: Credit Suisse | Rating: Outperform

The global research firm has maintained Outperform rating on the stock as it expects revenue/EBITDA CAGR of 20 percent over FY18-20.

PAT CAGR will be lower on tax normalisation while key risks include weak ordering activity & rise in the competitive intensity.

Mining orders will help in sector diversification over medium term. Out of the 12 new HAM projects, three have achieved financial closure.

Brokerage: Citi | Rating: Buy | Target: Rs 1,271 | Return: 49%

Dilip Buildcon remains one of its top picks in India industrials/infra. "Road asset sale to the Shrem group is on track and we are targeting order wins of around Rs 10,000 crore in FY19E.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol are his own and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

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First Published on Aug 17, 2018 03:01 pm
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