Emkay's research report on Ashoka Buildcon
Revenue came in at Rs4.56 bn +12.3% YoY lower than expectation of Rs4.94 bn due to miss in the construction revenue
EBITDA came in at Rs1.05 bn +21% YoY versus expectation of Rs1.02 bn due to higher than expected contribution from high margin BOT projects and higher than expected construction EBITDA margin at 13.7% (+140 bps YoY) against expectation of 11.8%
The company reported a loss at the PBT level (-Rs83.5 mn) due to higher capital cost (Interest and depreciation increased by 150%/28% YoY) on commissioning of Sambalpur
Baragarh Road Project.
Reduced target price to Rs150 on lower traffic growth from Sambalpur & PNG project, roll forward E&C valuation to FY17E. Given the traffic growth remained lower than expectation in ACL portfolio (Sambalpur, PNG, Belgaum project, Bhandara) we believe that the Value addition to be driven by newer project wins and increase stake in the profitable projects. Downgrade to accumulate with a target price of Rs 150", says Emkay Global Financial Services research report.
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