Buy Ashoka Buildcon; target of Rs 120: ICICI Direct
ICICI Direct’s research report on Ashoka Buildcon
Ashoka Buildcon’s (ABL) revenues grew 7.6% YoY to Rs 822.3 crore and were above our expectation of Rs 788.6 crore. EBITDA margins expanded 138 bps YoY to 14.9% and were above our expectation of 12.5%. RPAT grew 17.0% YoY to Rs 72.7 crore, much above our estimate of Rs 49.2 crore, on account of strong topline growth, EBITDA margin expansion and higher other income (Rs 39.2 crore in Q2FY20 vs. Rs 15.7 crore in Q2FY19).
Overall, we maintain our BUY recommendation on the stock with an SoTP-based target price of Rs 120/share. SBI-Macquarie stake exit could remain overhang on the stock in the near term.
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