Post 46 percent correction in Dilip Buildcon share price, CIMB believes concerns over high proportion of hybrid-annuity model (HAM) projects are factored in.
Dilip Buildcon share price was locked at 5 percent upper circuit at Rs 724.30 on Monday after global brokerage house CIMB upgraded the stock to Add from Hold rating.
There were pending buy orders of 15,182 shares, with no sellers available, at 12:08 hours IST.
Post 46 percent correction in the share price, the research house believes concerns over high proportion of hybrid-annuity model (HAM) projects are factored in.
Core EPC business remains robust and strong order book provides visibility to earnings, it said, adding increasing in-house projects warrants lower valuation multiple.
CIMB, however, slashed target price on the stock to Rs 800 from Rs 987.70 per share.
Nomura also reduced its target price on the stock to Rs 815 from Rs 1,322, but maintained Buy rating.
On the road sector, it said robust execution and orderbook implied strong revenue visibility at least until FY20/21 on the road sector, though macro headwinds raised risk perception and increased risk perception going into election year could be dampening investor appetite.
Low valuations may linger in the near-term, it feels.Key concerns for the road sector could be rising interest rates and crude oil prices, INR depreciation, risk of an unstable government and declining appetite of public sector banks for infrastructure funding.LIVE NOW... Video series on How to Double Your Monthly Income... where Rahul Shah, Ex-Swiss Investment Banker and one of India's leading experts on wealth building, reveals his secret strategies for the first time ever. Register here to watch it for FREE.