Dilip Buildcon Q3 Results Review - Debt Reduction Led By Alpha Alternative Deal: Dolat Capital

Dolat Capital Report

Dilip Buildcon Ltd. reported results in line, however adjusted profit after tax below estimates.

Dilip Buildcon posted + 8.1%/ + 27.5%/ + 137.8% YoY in revenue/ Ebitda/ APAT to Rs 25.7 billion/ Rs 3.2 billion/ Rs 750 million in Q3 FY24. Ebitda margin improved by 189 basis points YoY at 12.4% led by lower raw materials cost, employee expenses, which was partially offset by other expenses.

We expect revenue/ APAT compound annual growth rate of 3.3%/ 88.4% over FY23-26E, with Ebitda margin of 12.5%/ 12.6%/ 12.6% for FY24E/ FY25E/ FY26E.

We decrease earning per share estimates by 25.8%/ 32.6%/ 4.4% for FY24E/ FY25E/ FY26E factoring higher finance cost coupled with higher tax. Stock has run up by ~9% since our last result note on 8 November- 23.

Thus, we downgrade from 'Buy' to 'Accumulate' with a revised sum-of-the-parts of Rs 442.

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