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Last Updated : Aug 07, 2019 05:16 PM IST | Source: Moneycontrol.com

Buy Dilip Buildcon; target of Rs 720: HDFC Securities

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.

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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.


Outlook


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


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First Published on Aug 7, 2019 05:16 pm
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