Hold Dredging Corporation; target of Rs 370: ICICI Direct
ICICI Direct’s research report on Dredging Corporation
Revenues grew 38% YoY at Rs 165 crore (I-direct estimate: Rs 132 crore), mainly due to better fleet utilisation & low base. The base quarter was impacted by employee strikes against privatisation of the company The EBITDA margin increased 290 bps to 23.4%, leading to an absolute EBITDA of Rs 39 crore vs. Rs 7.2 crore in Q3FY18 (I-direct estimate: loss of Rs 1 crore) Subsequently, adjusted PAT came in at Rs 10 crore against a loss of Rs 23 crore in Q3FY18 (I-direct estimate: loss of Rs 28 crore).
However, as concerns remain on execution of ongoing projects and scaling up of the operations of the company by the consortium of ports, we maintain our HOLD recommendation on the stock, valuing it at Rs 370 (16x FY21E EPS).
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