Buy Ashoka Buildcon; target of Rs 131: HDFC Securities

HDFC Securities' research report on Ashoka Buildcon

Ashoka Buildcon (ASBL) reported revenue/EBITDA/APAT of INR 15.6/1.2/0.7bn, beating/(missing) our estimates by 11.3/(8.9)/(11.5)%. With approvals pending from only a few stakeholders, all the asset monetisation deals are expected to be completed by H1FY24. On the back of strong order inflows, the FYTD23 order book (OB) stands at INR 191.5bn (~3.2x FY23E revenue). The standalone gross/net debt decreased marginally to INR 8.5/5.8bn as of Dec’22 vs. INR 8.7/6.5bn as of Sep’22. The balance equity requirement for HAM assets as of Dec’22 stands at INR 2bn, of which INR 0.4bn would be funded in Q4FY23 and INR 0.9/0.4bn in FY24/25.

Outlook

ASBL has guided for a capex of INR 2.5bn for the next five quarters. It also guided FY23 revenue growth of 30% YoY. We cut our estimates to factor in weaker margins and maintain BUY, with a TP of INR 131/sh (9x Dec-24E EPS rollover).

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