Edelweiss bullish on Ashoka Buildcon has recommended buy rating on the stock with a target price of Rs 328 in its research report dated July 11, 2018.
Edelweiss' research report on Ashoka Buildcon
We recently interacted with Ashoka Buildcon’s (ABL) management to gain insights into the company’s future plans. Management is targeting order intake of ~INR50-60bn in FY19 and has guided for 40% top line growth each in FY19 and FY20, backed by a robust order book of ~INR119bn (>5x FY18 EPC revenues). It stated that ABL is in advanced stage of tying up funds for five HAM projects and expects to achieve financial closure (FC) for them over the next quarter. In our view, a lean balance sheet (debt:equity at 0.1x) will enable ABL to benefit from likely moderation in competition for HAM projects.
Likely pick up in execution and robust traffic growth reinforce our bullish stance on ABL. Maintain ‘BUY’ with SOTP‐based target price of INR328.
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