Ashoka Buildcon - Nagar Karmala concession prematurely terminated - Emkay

Reco: BUY
CMP: Rs 205
Target Price: Rs 340

- PWD(Mah) withdrew toll collection (effective Nov 4, 2012) for Nagar Karmala 36 month ahead of expected end date, Drop in interest rate main reason of early termination

- 14% cut in FY14E consolidated earnings owing to early termination. In FY14E, Nagar Karmala commanded ~4.5% of fair value, 8% of total toll collection & 15% of APAT

- 2 other projects Pune Shirur & Sherinallah are contracted with PWD (Mah) on similar concession agreement might face early termination - Both projects command ~3% of SoTP

- Earning cut in FY13E/14E by 6/14% owing to removal of contribution from Nagar Karmala project from our estimates. Maintain BUY with a reduced TP Rs 340 on cheap valuations.

Source : Equity Bulls

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