ICICI Direct is bullish on Ashoka Buildcon has recommended buy rating on the stock with a target price of Rs 150 in its research report dated February 01, 2019.
ICICI Direct's research report on Ashoka Buildcon
Ashoka Buildcon’s (ABL) revenues grew 61.6% YoY to Rs 1065.1 crore (our expectation: Rs 871.4 crore) possibly on account of strong execution during the quarter EBITDA margins expanded 189 bps YoY to 14.0%, higher than our expectation of 12.5% RPAT grew 19.6% YoY to Rs 62.2 crore. The company recognised provisions amounting to Rs 39.8 crore towards GVR Infra Project Ltd in Q3FY19. Adjusting for this exceptional item, PAT growth was at 96.0% YoY to Rs 101.9 crore (our estimate: Rs 63.8 crore).
We continue to maintain our BUY recommendation with an SoTP based target price of Rs 150/share. We value ABL’s BOT projects at Rs 26.4/share, EPC business (net of debt) at Rs 90.1/share (6.5x FY20E EV/EBITDA) and ACL at Rs 30.5/share.
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