HDFC Securities is bullish on Dilip Buildcon has recommended buy rating on the stock with a target price of Rs 737 in its research report dated May 11, 2019.
HDFC Securities' research report on Dilip Buildcon
DBL reported 4QFY19 muted revenue of Rs 25.7bn (flat YoY, 5% miss). Delays in receiving appointed dates (AD) from NHAI resulted in lower execution. About 7 out of 12 HAM projects’ AD is yet to come (expected by 1HFY20E, ~Rs 68bn in EPC value, 32% of order book). EBITDA: Rs 4.5bn (3% miss). EBIDTA margins declined 99bps YoY to 17.5%. APAT: Rs 2.2bn was 14% miss, as early completion bonus on Lucknow Sultanpur project (~Rs 378mn) will be accounted during 1QFY20E (while we had expected the same to come in 4QFY19).
We maintain BUY on DBL, with a reduced TP of Rs 737/sh (vs. Rs 833/sh earlier). We have cut our target EPC multiple from 13.5x to 12x to factor in the high debt, delay in receiving appointed dates for 32% of order book & limited visibility of monetization of under construction HAM projects.
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