Buy Ashoka Buildcon, target price Rs 206: HDFC Securities

HDFC Securities has a buy call on Ashoka Buildcon with a target price of Rs 206. The current market price of Ashoka Buildcon is Rs 173.45. The time period given by the analyst is a month when Ashoka Buildcon price can reach the defined target. Ashoka Buildcon, incorporated in 1993, is a Mid Cap company with a market cap of Rs 4864.65 crore, operating in the Infrastructure sector.

Ashoka Buildcon's key products/revenue segments include Income From Construction Work, Ready Mix Concrete, Other Operating Revenue, Scrap and Land for the year ending 31-Mar-2024.

Financials

For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 2426.36 crore, down -4.06 % from last quarter Total Income of Rs 2528.99 crore and down -10.10 % from last year same quarter Total Income of Rs 2698.94 crore. The company has reported net profit after tax of Rs 661.41 crore in the latest quarter.

The company's top management includes Mr.Ashok Katariya, Ms.Shilpa Hiran, Mr.Mario Nazareth, Mr.Nikhilesh Panchal, Mr.Ashok Katariya, Mr.Satish Parakh, Mr.Sanjay Londhe, Mr.Ashish Kataria, Mr.Mahendra Mehta, Ms.Shilpa Hiran, Mr.Mario Nazareth, Mr.Mahendra Mehta, Mr.Ashish Kataria, Mr.Satish Parakh, Mr.Sanjay Londhe, Mr.Ashish Kataria, Mr.Mahendra Mehta, Ms.Shilpa Hiran, Mr.Mario Nazareth, Mr.Nikhilesh Panchal, Mr.Ashok Katariya, Mr.Satish Parakh, Mr.Sanjay Londhe, Mr.Nikhilesh Panchal. Company has SRBC & Co LLP as its auditors. As on 31-12-2024, the company has a total of 28 Crore shares outstanding.

Investment Rationale
Given the stable OB, improving visibility on asset monetization, and margin expansion on the back of new order execution, HDFC Securities maintains a BUY rating. They expect Revenue/EBITDA/PAT to grow at a CAGR of 9%/21%/24% over FY24?27E. They think the base case fair value of the stock is Rs.189 (10.3x FY27E EPS) and the bull case fair value is Rs.206 (11.2x FY27E EPS) over the next 2-3 quarters. Investors can buy the stock in the band of Rs 170-174 (9.4x FY27E EPS) and add more on dips to the band of Rs. 153-156 (8.4x FY27E EPS).

Promoter/FII Holdings
Promoters held 54.48 per cent stake in the company as of 31-Dec-2024, while FIIs owned 8.52 per cent, DIIs 15.46 per cent.