Ashoka Buildcon - 4QFY2012 Result Update - Angel Broking

For 4QFY2012, on a consolidated basis, Ashoka Buildcon (ABL) reported a decent set of numbers (adjusting for impact of change in accounting policy in 4QFY2011). Order book as of 4QFY2012 stood at Rs.4,967cr (3.9x FY2012 E&C revenue), providing revenue visibility. As per management, the PE deal of Rs.700cr-800cr for funding its equity requirement of under-construction projects is expected by the end of 1QFY2013. We maintain our Buy rating on the stock.

Revenue and EBITDAM in-line, lower depreciation leads to higher-than-expected PAT: ABL's top line witnessed decent growth of 16.9% (excluding Rs.200cr revenue in 4QFY2011 owing to change in accounting policy) to Rs.468cr, marginally lower than our estimate of Rs.495cr. On the EBITDAM front, ABL's margin came in at 20.0%, 30bp lower than our estimate of 20.3%. At the earnings front, ABL reported decent growth of 21.9% (excluding exceptional income of Rs.107cr in 4QFY2011) to Rs.47cr, which was higher than our estimate of Rs.34cr owing to lower depreciation. During the quarter, ABL changed its depreciation policy, resulting in lower depreciation for the quarter.

Outlook and valuation: ABL needs to infuse equity worth ~Rs.1,100cr (including Cuttack Angul project) for its under-construction/development road BOT projects. Further, as per management, ABL is at an advanced stage of roping in a strategic investor for investment of Rs.700cr-800cr in the holding company (eight road projects) and expects the deal to happen by the end of 1QFY2013. We believe conclusion of this deal would be positive for the company as it would not only aid ABL to put in current equity requirement but also provide legroom for more wins in the future. However, valuation at which the deal is concluded would be an important thing to look out for. We maintain our Buy recommendation on the stock with an SOTP target price of Rs.273.

Source : Equity Bulls

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