Ashoka Buildcon Ltd. share price target

Diversified order book, decent execution capabilities, expected pick-up in execution and focus on debt reduction and working capital are expected to outline ABL's performance over the next few years...

Ashoka Buildcon (ASBL) Q2FY22 (standalone) revenue and EBITDA came lower than our and consensus estimate. This is led by delay in execution due to heavy monsoon. At EBITDA level, result is lower than our and consensus estimate by 15%. ASBL has revenue guidance at 20% YoY increase for FY22E and margins at ~12-12.5%. H1FY22 Order book at Rs120bn (equals 3x TTM Revenue) with Roads & Railway at 68%. YTDFY22 total order inflow was strong at Rs33.5bn. We have introduced FY24E and roll forward TP at Rs135 (exhibit 8). Maintain BUY. ASBL has renegotiated the terms of shareholders agreement regarding the Investors exit options from the proceeds of the...

of roads and bridges having an integrated portfolio of EPC, BOT and HAM projects. Besides roads construction, ABL also has an established presence across varied infra verticals such as power transmission, railways, city gas distribution. Diversified order book, decent execution capabilities, expected pick-up in execution, and focus on debt reduction and working capital are expected to outline ABL's performance over the next few years...

The current order book stands at ~INR119b. Roads HAM/EPC projects contributed INR28b/INR45b to the order book, while Buildings EPC and Power T&D contributed INR19b each. Railways contributed INR8b. The total order book inflow stands at INR3.4b for YTD....

Ashoka Buildcon (ASBL) Q1FY22 standalone PAT came 19%/ 25% higher than our / consensus estimate. This is led by better execution as work efficiency improved and currently operating at 100% efficiency level. On execution front, company has guided for revenue increase of 25% with EBITDA margin of 12-12.5% for FY22E. Post the result we have increased revenue to 20% YoY pa for FY22E/23E. This has resulted in increase in the EPS by 4% and 6% for FY22E and FY23E respectively. And SOTP base TP is revised to Rs135 (earlier Rs128), TP implied valuation is at 7x FY23E EPS (last 5 years avg at 12x). Catalyst for stock performance is conclusion of ACL asset sale, execution...

Diversified order book, decent execution capabilities, expected pick-up in execution and focus on debt reduction, working capital are expected to outline ABL's performance over the next few years...

We remain positive on the company given a) its excellent blend of diversified EPC orders and Asset ownership (in 23 Road assets and 3 City Gas Distribution assets), b) stable EPC margins and c) healthy order book (Rs94.7bn as at 1QFY22) and foray into new verticals i.e. Railways (8% of order book) and EPC buildings (13%). We expect revenue/PAT CAGR of 9.2%/1.4% for FY22/23E respectively. At the CMP, the stock trades at an EV of...

Due diligence for monetization (SBI Macquarie stake sale) is in advanced stage by potential investors; expect SPA to be signed by Q2/Q3 FY22E. ASBL's 4Q performance was healthy with revenues and margins coming above our estimates. Amidst the second wave of Covid, execution was...

Ashoka Buildcon (ASBL) Q3FY21 (standalone) PAT is lower than our estimate. This is led by lower execution and margin. But management guides to make for revenue shortfall in Q4FY21. This will be driven by 3 projects i.e. Kandi and 2 projects in Bihar. ASBL expects revenue of Rs39-40bn in FY21, YTDFY21 revenue is at -9% YoY and which implies Q4FY21 revenue to increase by 20%. Order book as of 9MFY21 at Rs92bn equals to 4x TTM revenue. We have increased the execution run rate and lowered margin expectations. This has resulted in marginally increase in EPS by 1-4% for FY21E to FY23E. On expectation of pick in capex cycle, driven by allocation to road sector in the...

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...

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...

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...

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...