Motilal Oswal is bullish on Ashoka Buildcon has recommended buy rating on the stock with a target price of Rs 290 in its research report dated January 31, 2018.
Motilal Oswal's research report on Ashoka Buildcon
Standalone revenue grew 26% YoY to INR6.8b in 3QFY18, ahead of our estimate of INR6.2b, led by a pick-up in execution of EPC projects in hand. EPC revenue grew 26% YoY to INR6.2b. We note that standalone revenue in 2QFY18 was impacted by a) work disruption at the eastern peripheral highway project, b) contract renegotiations with vendors post GST rollout and c) flood situation in Bihar.
OutlookASBL is well placed to benefit from the upcoming opportunities in the roads sector, given its well-funded balance sheet. Its healthy order book lends confidence about EPC revenue CAGR of 18% over FY17-20E. We value the company on SoTP basis with a revised target price of INR290.
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