Ashoka Buildcon Ltd. share price target

We maintain BUY on ASBL ASBL reported strong execution led recovery with Rev/EBIDTA/PAT growing 25.2/28.2/21.6% YoY. EPC segment contributed 93.3% to Rev (Rs 6,148mn) and grew 26.4% YoY. Sales from goods grew to Rs 354mn (4.8% YoY)/BOT grew ~44.1% YoY to Rs 87mn.

We maintain BUY on ASBL with an increased TP of Rs 274/sh. ASBLs 2QFY18 net revenue declined ~14.5% YoY to Rs 3.8bn, owing to (1) Land compensation-related agitation on Eastern Peripheral project, and (2) GST negotiation with T&D; segment supplier chain. This resulted in Rs 2bn of execution miss. With these issues settling, execution has picked from Sep-2017.

Ashoka Buildcon's (ABL) revenues de-grew 14.5% YoY to | 378.7 crore (our expectation: | 719.7 crore) due to muted execution owing to work stoppage at Eastern-Peripheral expressway for 50 days and slow moving power orderbook due to GST issues EBITDA margins contracted 240 bps YoY to 13.4% (our expectation: 13.0%) mainly due to higher employee expenses (6.5% of revenue in Q2FY18 vs. 4.7% of revenue in Q2FY17) PAT declined 27.9% YoY to | 32.7 crore (our estimate: | 59.0 crore)...

Maintain BUY with SOTP-based TP of Rs 235/sh. Much needed execution push in Eastern peripheral, Kharar Ludhiana and JNPT road projects (cumulative Rs 3bn revenue contribution) led to 1QFY18 revenue beat of 23.4%. This along with 77bps EBIDTA margins expansion (to 13.5%), lower depreciation (-8.2% YoY) and taxes, resulted in 101% YoY APAT growth.

Ashoka Buildcon (ABL) reported Q1FY18 results on a standalone basis. Hence, they were not comparable with our estimates Revenues grew 54.3% YoY to | 722.8 crore mainly on account of strong execution during the quarter EBITDA margins contracted 23 bps YoY to 13.5% mainly due to...

BOT collections (for existing portfolio) grew 8% YoY to Rs 2.6 bn, primarily driven by traffic growth.Excluding projects which are due to get over soon, toll collection was up 10% YoY. EPC execution maintains its trend of steady growth (up 13% in Q4 and ~15% in H2).

ASBL 4QFY17 adjusted PAT came in 31% below our estimates on account of EBIDTA margins contraction and higher interest expense. EBITDA margins contracted ~200bps YoY to 10.4% (140bps lower than our estimates) led by increase in material expenses (239bps YoY), higher employee costs (44bps YoY).

PAT grew 15.2% YoY to | 65.3 crore mainly on account of lower interest expenses (| 18.1 crore in Q4FY17 vs. | 29.6 crore in Q4FY16) and lower effective tax rate (11.7% in Q4FY17 vs. 33.4% in Q4FY16) Highest ever order backlog of ~| 7005 crore The company witnessed highest ever order inflows (OI) of ~| 3926 crore in FY17 taking its orderbook to ~| 7005 crore, 3.3x its construction revenues (on a TTM basis). The OI does not include the recently won power project in Jharkhand in May, 2017 worth ~| 282.7 crore. Even in...

Ashoka Buildcon (ABL) signed a deal with Mumbai International Airport Ltd (MIAL) to developland parcels around the airport. While this is a diversification into unfamiliar terrain, prima facie analysis suggests the deal is close to prevailing rates in the region (transaction NPV of Rs 5.8 bn or Rs 5

ASBL 3QFY17 Revenue, EBIDTA and PAT estimates were 5.5/6.8/35.4% ahead of our estimates on account of execution pickup and savings in depreciation, interest and tax. EBITDA margins expanded ~59bps YoY to 12% (20bps ahead of our estimates) led by increase in other op income to Rs 35mn YoY (largely scrap sales).