Riding the volume growth

UPDATE NOTE

Forged in strength built with metal

Strong RevPAR, healthy room additions drive growth

Stitching a glorious future

Redefining the stainless future

Immersive Entertainment, Beyond Boundaries.

Given the strong OB, improving visibility on asset monetization, and likely cash inflow from asset monetization (INR 31bn) exceeding market cap (INR 29bn), we increase our SOTP valuation to INR 189/sh (9x Sep-25E EPS, asset value repriced higher). We maintain our BUY rating. Ashoka Buildcon (ASBL) has underperformed the broader infra space over the last 1Y/2Y/5Y, despite its order book multiplying 2x over FY19-23. (1) ASBL has a well-diversified OB at ~2.5x FY23 standalone revenue which provides revenue visibility over the medium term. (2) At the standalone level, the company had gross/net debt of INR 10/8.1bn (gross D/E 0.3x) as of Mar'23 vs. INR 5.6/4.2bn as of Mar'22. (3) Healthy asset monetization pipeline, total proceeds over the next three years could cumulatively exceed the current market cap. (4) Standalone EPC business valuation is not priced in the current market cap.

Inflection in growth trajectory

Breaking the Sarkari bank' stereotype

MCU foray to fasten' growth

Gross revenue showed impressive growth, reaching INR 6,527 mn, which is a 76.6% increase YoY and a 57.4% increase QoQ. This growth was primarily driven by outstanding performance in both the digital payments and software platforms business.

We see Shyam Metalics and Energy (SMEL) effectively evolving on its 3C principle: Comprehensive products, Capex focus and Cost efficiencies. The recently announced capex plan of INR 39bn illustrates the company’s sharp focus on both scope and scale.

Kilpest India (KLPI) has seen multiple transformations in the last ~50 years of existence.

Heading towards a profitable and faster delivery

BPCL reported a strong Q1FY24 with EBITDA of INR 149.6bn and recurring PAT of INR 99.2bn, up 34%/32% QoQ respectively, and materially ahead of the operating loss of Rs59bn and net loss of INR 62.9bn in Q1FY23 (I-Sec: EBITDA INR 107bn, PAT INR 66.3bn).

Lubricating a healthy growth trajectory