Buy Sadbhav Engineering; target of Rs 380: Emkay

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26 Aug, 2025 12:21

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Emkay's research report on Sadbhav EngineeringRevenue came in at Rs8.29 bn +21% YoY higher than our expectation of Rs7.88 bn driven by stronger execution, largely led by captive BOT projectsEBITDA came in at Rs894 mn +25% YoY versus expectation of Rs828 mn led by higher revenue flow and margins. EBITDA Margin came in at 10.8% +35 bps YoY versus expectation of 10.5% on account of higher execution of captive BOT projectsNet profit came in at Rs395 mn +46.3% YoY (against our expectation of Rs306 mn) due to higher operational profitability and lower than expected interest cost.Interest cost has been net off by interest received on loans given to subsidiaries. Consequently net interest cost has dropped 4.2% YoY and 15% sequentiallyWe increase our FY16E/17E earnings by 5.4%/3.8% on lower borrowing costs and tax outgo as well as higher execution in FY17E"Well placed to fund equity requirement of Rs2.2bn for BOT projects over FY16E-17E, given 60% of the equity investment is operational, enhanced visibility of raising further growth capital at the SIPL level. Maintain Buy We raise our target price to Rs380/share", says Emkay Global Financial Services research report.For all recommendations, click hereDisclaimer: 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.

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