Hold Ashoka Buildcon; target of Rs 75: ICICI Direct

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ICICI Direct's research report on Ashoka Buildcon

Ashoka Buildcon (ABL) witnessed a strong sequential recovery and delivered a better-than-expected set of numbers on the revenue and profitability front. Standalone revenue was up 6.7% YoY to Rs 877 crore as labour availability and execution have returned to pre-Covid levels. Reported EBITDA margin was flattish YoY to 14.9%, also aided by release of contingencies due to project completion. RPAT grew 44% YoY to Rs 104.7 crore on account of higher other income, lower tax and interest coupled with higher reported EBITDA.

Outlook

We conservatively build in construction revenue growth at 4.7% CAGR to Rs 4,316 crore in FY20-22E. We maintain HOLD rating on the stock with an SoTP-based target price of Rs 75.

For all recommendations report, click here

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