Ashoka Buildcon Ltd - PE eliminating the funding risk - Emkay

Reco: BUY
CMP: Rs 255
Target Price: Rs 350

- In Line Quarter - EBITDA at Rs1.0 bn (+9% yoy) inline. Revenues at Rs 4.6bn grew +20%yoy (inline) driven by 19% E&C growth & BOT revenue at Rs787mn +23%yoy.

- ABL divests 34% stake in BOT Holdco Ashoka Concessions (ACL) at Rs7bn to SBI-Macquarie (SBIM) eliminating equity shortfall & execution hurdles. Upgrade FY14 EPS by 11% on lower debt assumptions with funding in place.

- Dhankuni-Kharagpur received appointed date & commence toll collection with Rs 4.4 mn/day- Structure completion ahead of schedule by Oct-13 will boost daily collection by >30%.

- SBIM deal values ABL's 66% stake in ACL at Rs 13.6bn unlocking value. Further commitment to provide growth capital. Adequate order book visibility, execution ramp up & new wins to drive stock performance - Maintain BUY.

Source : Equity Bulls

Keywords