Ashoka Buildcon Q2 Results Review - Traction In H2: IDBI Capital

IDBI Capital Report

Ashoka Buildcon Ltd.'s Q2 FY25 operational numbers were weak due to weak execution in monsoon and slower roll out of government expenditure. Ebitda margin stood at 8.2% and Ashoka Buildcon sees that margin to improve in Q2 FY26 as project with low margin will complete in FY25. Order inflow stood at Rs 60 billion for Ashoka Buildcon in H1 FY25 and expects more inflow of Rs 40-50 billion in H2 FY25.

We value the company's standalone business at 13 times PER FY26E. There is upside risk to our target price-

1. on asset monetization, more than book value

2. order inflow uptick, resulting in revenue increase more than our estimate.

We have downgraded the stock to Hold with target price of Rs 264. Asset Monetization of 11 hybrid annuity model/five built-operate-transfer/ 1 Annuity project is in final stages of closing the SPA. Though, this was earlier expected in Q2 FY25. Closure of this reduce debt from current level of Rs 13 billion.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.