Motilal Oswal has provided a buy rating to Ashoka Buildcon with a focus on price of Rs 98. The share price moved up by 4.97 for each cent from its past close of Rs 56.30. The previous traded stock price is Rs 59.10.
In the fourth quarter of FY20, revenue declined 4 for each cent 12 months on calendar year to Rs 12.5 billion which was in line with brokerage estimates and was greater than the performance of its peers. EBITDA grew 26 for each cent yr on 12 months to Rs 2.3 billion (50 per cent forward of our est.) EBITDA margin arrived in at 18.2 per cent owing to release of contingencies linked to ability jobs and execution of larger margin assignments.
Interest cost stood at Rs 209 million from brokerage estimate of Rs 332 million – a positive surprise. Adjusted PAT grew 56 for every cent calendar year on 12 months to Rs 1.6 billion, 104 for every cent forward of brokerage estimate.
According to the brokerage, Ashoka Buildcon’s order book (OB) stands at Rs 90 billion with OB/Revenue ratio increasing to 2.4 situations. Whilst the brokerage has factored in the weak execution in the initially half of FY21 due to the Covid-19 linked concerns, the enterprise is expected to ramp up execution future yr owing to its powerful balance sheet position.
According to the brokerage, a potent balance sheet augurs very well for the company: As at FY20, internet D/E at standalone level was .1 situations. Motilal Oswal thinks ASBL is perfectly positioned to fund its equity determination and expects web credit card debt to continue to be at .2 instances for FY21/FY22E, earning it a single of the strongest street gamers in the sector.
Resource: Motilal Oswal
Modified for valuation of the BOT assets, the inventory trades at FY21/FY22E P/E of 5 instances / 3.7 situations against an ordinary of 8 situations for mid-cap EPC firms. While the pending exit of the non-public equity trader in the asset small business is an overhang for the inventory, the brokerage believes that it delivers an desirable entry point, according to the brokerage.
The brokerage has raised its FY21/FY22E EBITDA estimates by 3 for each cent/11 for every cent due to a strong order book. Standalone EPS estimate revision looks larger at 32 per cent/36 per cent owing to much better-than-predicted balance sheet enhancement. It maintains buy with revised target price of Rs 98 from Rs 92 previously as it components in decrease toll selection in the BOT portfolio.
For the quarter finished March 31, 2020, the corporation reported consolidated sales of Rs 1584.22 crore, up 23.73 per cent from past quarter sales of Rs 1280.36 crore and down -.79 per cent from very last year’s exact same quarter sales of Rs 1596.81 crore. The firm claimed net profit right after tax of Rs 145.24 crore in the most current quarter.
Promoters held 54.3 for each cent stake in the business as of March 31, 2020 although FIIs held 5.5 for each cent, DIIs 31.6 for every cent and general public and many others 8.6 for each cent.