Buy Ashoka Buildcon; target of Rs 167: Prabhudas Lilladher

February 14
02:25 2020

Prabhudas Lilladher’s research report on Ashoka Buildcon

We remain positive on the company given a) its excellent blend of diversified EPC orders and Asset ownership (23 Road assets and 3 City Gas Distribution assets), b) stable EPC margins, c) healthy order book (Rs80.9bn as on 3QFY20). Equity requirement in HAM Projects would be ~Rs4.5bn over next two-three years which the management believes would be funded through internal accruals. ASBL is one of the few companies in infra space successfully diversifying into new verticals such as Railways (13% of order book) and smart cities (maiden order Rs3.2bn) over a period of time. In our view, ACL’s asset monetisation would a key monitorable and if concluded within a year would remove the overhang on the stock.


At CMP, the stock trades at an EV of 5.8x/5.7x FY20E/FY21E EBITDA. We maintain BUY rating on the stock with a SoTP based TP of Rs167.

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