29-05-2025
Buy Ashoka Buildcon, target price Rs 273: HDFC Securities
HDFC Securities
has maintained its
buy call
on
Ashoka Buildcon
with a revised target price of Rs 273. The current market price of
Ashoka Buildcon
is Rs 216.2. Ashoka Buildcon, incorporated in 1993, is a Mid Cap company with a market cap of Rs 5973.79 crore, operating in Infrastructure sector.
Ashoka Buildcon's key products/revenue segments include Income From Construction Work, Ready Mix Concrete, Other Operating Revenue, Scrap and Land for the year ending 31-Mar-2024.
Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 2755.42 crore, up 13.56% from last quarter Total Income of Rs 2426.36 crore and down -12.19% from last year same quarter Total Income of Rs 3137.88 crore. The company has reported net profit after tax of Rs 451.22 crore in the latest quarter.
The company's top management includes Katariya, Hiran, Nazareth, Panchal, Katariya, Parakh, Londhe, Kataria, Mehta, Hiran, Nazareth, Mehta, Kataria, Parakh, Londhe, Kataria, Mehta, Hiran, Nazareth, Panchal, Katariya, Parakh, Londhe, Panchal. Company has SRBC & Co LLP as its auditors. As on 31-03-2025, the company has a total of 28 crore shares outstanding.
Investment Rationale
Ashoka Buildcon's revenue/EBITDA/APAT came in at Rs 19.7/1.4/0.6bn, a (miss)/beat of -19.3/-35.3/-39.6% vs. HDFC Securities' estimates. EBITDA margin: 7.3% (-19/-186bps YoY/QoQ) was lower than the estimate of 9%, owing to weak margins in legacy projects. ASBL has guided for 10% revenue growth YoY in FY26 and expects to record higher EBITDA margins of 10-11% during that year on the back of new order execution. The OB as of Mar?25 stood at Rs 149 billion (~2.1x FY25 revenue), while the Order Inflow (OI) stood at Rs 95 billion. Further, ASBL guided for OI of Rs 100-120 billon for FY26, while participating in bids worth INR 1.1trn. Business-wise, the revenue is well diversified with HAM (roads)/EPC (roads) /power T&D/railways/EPC (buildings) and others comprising 12.5/58.3/2.8/2.11/24.3%. Additionally, ASBL has already invested Rs 11.1 billion in the HAM portfolio; the balance equity requirement in its existing NHAI HAM assets is Rs 3.7 billion as of Mar?25. Given the stable OB, improving visibility on asset monetisation, and margin expansion on the back of new order execution, the brokerage maintains BUY. However, they have tweaked the SOTP to Rs 273/share (11x Mar-27E EPS) basis lower than expected execution and factoring in 1.4x P/BV for HAM assets.
Promoter/FII Holdings
Promoters held 54.48 per cent stake in the company as of 31-Mar-2025, while FIIs owned 7.48 per cent, DIIs 14.93 per cent.
