Ashoka Buildcon Ltd. share price target

With major due diligence done and binding offers received, negotiations & documentation of SBI Macquarie stake sale expected to conclude by Mar'21. ASBL's 3Q performance was muted with revenues and margins coming below our and street estimates, mainly due to delayed commencement of 3 major projects. ASBL now received long-awaited AD in Kandi Ramsanpalle HAM...

ASBL's 3QFY21 revenue came in flat YoY, in line with our estimate. Revenue would have been higher as execution of three projects was delayed and shifted to 4QFY21. EBITDA stood 15% below our estimate as an adverse revenue mix led to 180bp YoY decline in EBITDA margin (120bp below our expectation). As a result of lower depreciation and interest cost, coupled...

ABL's order book (OB) at the end of Q3FY21 was at | 9,152 crore (OB-to-bill ratio of 2.5x TTM revenues) spread across roads - HAM (| 3,923 crore), roads - EPC (| 2,988 crore), power T&D; and others (| 1,466 crore), railways (| 692 crore), and CGD (| 83 crore) segments. During Q3FY21, the company has secured projects from a) NTPC Renewable Energy worth | 503 crore for EPC package of 150 MW solar PV project in Rajasthan and b) smaller contracts in power segment worth ~| 300 crore in Uttar Pradesh and Bihar. Going forward, the management has guided for order inflow of | 2,000-2,500 crore...

Negotiations restarted for SBI Macquarie stake sale with prospective buyers and deal progressing in right direction as per management. ASBL reported decent quarterly performance with execution ramping up (6% YoY growth) across its project sites led by rise in labour availability. Margins...

Ashoka Buildcon (ASBL) Q2FY21 (standalone) PAT is higher than our estimate by 25%. Beat is led by better execution (revenue) and EBITDA margin. Revenue is up 7% YoY and business has achieved normalcy. ASBL has guided for FY21E execution (revenue) in-line with FY20. Order inflow in the H1FY21 is Rs24bn (orders received in road EPC) and company expects incremental orders of Rs30-40bn in H2FY21. Order book as of H1FY21 at Rs93bn equals to 2.4x TTM revenue. We have factored improved execution in our FY21E/22E numbers and revised EPS up by 18%/12% (exhibit 8). In the note, we introduced FY23 financials and roll forward TP to FY23E. Our revised TP is Rs111 where...

We are impressed by ABL's continued improvement in leverage at standalone levels and execution recovery. However, the SBI-Macquarie stake exit stays the key overhang on the company. We believe asset monetisation will be key for rerating of EPC business multiples. We conservatively build in construction revenue growth at 4.7% CAGR to | 4,316 crore in FY20-22E. We maintain HOLD rating on the stock with an...

Negotiations restarted for SBI Macquarie stake sale with prospective buyers and deal progressing in right direction as per management. ASBL reported decent quarterly performance with execution ramping up (6% YoY growth) across its project sites led by rise in labour availability. Margins...

Ashoka Buildcon's (ABL) performance was a mixed bag in Q1FY21. Revenues de-grew ~35% YoY to | 572.4 crore on account of weaker-thanexpected execution during the quarter owing to Covid-19 led challenges such amid lockdown and labour shortage. Reported EBITDA margin was up 180 bps YoY to 14.3%, mainly on account of release of contingencies on account of project completion. RPAT grew 11.9% YoY to | 68.1 crore on account of higher other income (driven by insurance claim and restructuring of equipment loans) and higher reported EBITDA. Order book at | 8,617 crore as of Q1FY21...

SBI Macquarie stake sale deal continues to be an overhang on the stock, negotiations to likely restart with prospective buyers. ASBL reported resilient operational performance in a tough scenario with revenues falling 34% YoY due to Covid-19 pandemic, impacting construction...

12 August 2020 Ashoka Buildcons (ASBL) 1QFY21 results were robust. Top line decline was limited to INR5.7b (18% above est.). On account of one-off items as well as release of contingencies, EBITDA and PAT came in well above expectations. A key surprise was the reduction in gross debt to INR2.4b (v/s INR4b at end- FY20), indicating strong focus on cash flow management. Strong execution over the past two years is commendable. However, the pending PE exit in the asset portfolio is an overhang on the stock. We have increased our FY21E EPS by 16%, but FY22E EPS remains broadly unchanged. Strong order book and continuous improvement in the balance sheet augurs well for ASBL. Maintain with revised TP of INR88. Revenue declined 35% to INR5.7b and was 18% above our expectations. EBITDA was down 25% YoY to INR819m (ahead of est.