HDFC Securities is bullish on Dilip Buildcon has recommended buy rating on the stock with a target price of Rs 720 in its research report dated August 06, 2019.
HDFC Securities' research report on Dilip Buildcon
DBL reported 1QFY20 revenue of Rs 22.5bn (-8% YoY, 9% miss). Six HAM projects received Appointed Date during the quarter. With this only 2 HAM projects AD is awaited (Rs 25bn EPC value, 13% of order backlog). DBL remains confident of achieving Rs 105bn of revenue guidance even if there is no contribution from these 2HAMs to FY20 revenue. EBITDA: Rs 4.5bn (9% miss). EBIDTA margins declined 113bps YoY to 16.6%. Early completion bonus of Rs 378mn for Lucknow Sultanpur project was recognized in 1QFY20 (we have regrouped it in other income, hence reduced EBITDA margin); APAT: Rs 1.25bn was a 14% miss. Higher depreciation, interest and tax rates impacted profits. 1QFY20 order book stood at Rs 190.2bn with Rs 11.2bn new order wins during 1QFY20. DBL has guided for Rs 120-150bn of new inflows for FY20E and ~0.8x net D/E.
We maintain BUY on DBL, with a reduced TP of Rs 720/sh (vs. Rs 737/sh earlier). We retain our target EPC multiple at 12x FY21E EPS to factor in limited headroom on debt reduction. Large part of cash generation will go towards meeting pending equity requirement for under-construction HAM projects.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.