Q3FY21 Result Update - Ashoka Buildcon - ICICI Direct

Ashoka Buildcon (ABL) reported a weaker-than-expected performance during Q3FY21 wherein standalone revenue were flattish YoY at Rs. 981 crore largely impacted by delays in appointed dates (AD) in certain HAM, EPC projects. Also, its operating margin declined 188 bps YoY to 10.8%, owing to a muted topline performance, unfavourable change in project mix and deferral of profitability recognition in some projects. At the PAT level, weak operating show translated into muted bottomline at Rs. 85.7 crore, flat YoY).

Valuation & Outlook

Key factors such as a) ABL's weaker-than expected performance in Q3FY21, b) muted order inflows, c) moderated operating margin and d) persistent delay in SBI-Macquarie stake sell remain a cause of concern for us. We believe asset monetisation will be key for rerating of EPC business multiples. We conservatively bake in construction revenue growth at 9% CAGR in FY20-23E (~15% in FY21-23E) to Rs. 5,099 crore and moderation in EBITDA margins as guided. We maintain HOLD rating on the stock with an SoTP-based target price of Rs. 110/share (vs. Rs. 95/share earlier).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_AshokaBuildcon_Q3FY21.pdf

Shares of ASHOKA BUILDCON LTD. was last trading in BSE at Rs.109.85 as compared to the previous close of Rs. 110.7. The total number of shares traded during the day was 76658 in over 966 trades.

The stock hit an intraday high of Rs. 113.6 and intraday low of 108.65. The net turnover during the day was Rs. 8537588.

Source : Equity Bulls

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