Accumulate Ashoka Buildcon; target of Rs 195: Emkay

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26 Aug, 2025 12:21

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Emkay's research report on Ashoka Buildcon

Revenue came in at Rs6.3 bn flat growth YoY versus expectation of Rs6.2 bn, lower than expected construction revenue was offset by higher than expected BOT revenue

EBITDA came in at Rs1.84 bn +30.4% YoY versus expectation of Rs1.45 bn due to recognition of Dhankuni Kharagpur project and EBITDA Margin came at 29% versus expectation of 23.4% due to higher contribution from high margin BOT business

Adjusted net profit (ex-minority interest) reported loss of Rs 41.5 mn versus expectation of Rs121mn due to higher than expected capital cost (interest cost & depreciation) and tax outgo

We have reduced our earnings estimates for FY16E by 20.03% on higher depreciation costs and higher tax rate. We have raised our target price to Rs195 per share on increase in stake in the Jaora Nayagoan road project. Maintain Accumulate

"Q1FY16 BOT EBITDA came at Rs1.16 bn versus expectation of Rs850 mn –EBITDA Margin came at 67.8% contracts by 553 bps versus our expectation of 65%. The company recognized revenue from Dhankuni Kharagpur project for the full quarter which earlier used to get capitalised in CWIP. Overall EBITDA came in at Rs1.83 bn +30.4% YoY (vs estimate of Rs1.45 bn) due to recognition of Dhankuni Kharagpur project. Higher than expected capital cost (interest & depreciation) and tax outgo capped the profitability despite the beat on operational profitability and reported profit after tax of Rs123 mn against expectation of Rs267 mn. Depreciation was higher as the company recorded additional depreciation cost of Rs180 mn for Dhankuni Kharagpur of which 75% was amortization of toll rights. Tax rate came at 119.6% versus expectation 53.8% (tax rate is higher due to low contribution from BOT projects at PBT level). Adjusted net profit (ex-minority interest) reported loss of Rs 41.5 mn versus expectation of Rs121 mn", says Emkay Global Financial Services research report.

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